Domestic equity markets kicked off 2019 with a very strong January, as most stocks posted sizable gains that were in sharp contrast to the deep losses experienced in December. The S&P 500 Index posted its best January return since 1987, boosted by signals that the Federal Reserve (Fed) would be more patient with further rate increases and amid improved hope for a trade deal with China.
- Market & Industry Insight
Let’s be clear: if, during a press conference meant to address a scandal, a spouse must quietly and not sarcastically advise the central figure in the brouhaha not to break into dance, it’s a sign things aren’t going well.
While we have long advocated that alternatives should be a core allocation within any diversified portfolio, we believe that in this environment they will be even more helpful to investors.
With a decision on Brexit just a few weeks away, the fog of uncertainty surrounding the situation is thicker than ever. The stakes for the U.K. economy and markets are high and, at the moment, a number of potential outcomes remain on the table.
What a difference a month – give or take – can make. In December, the Federal Reserve (Fed) raised the Fed Funds rate 25 basis points (think of a basis point as cents are to a dollar) to a range of 2.25% to 2.50% and the market promptly sold off a lot, see the Financial Times image below.
The partial US government shutdown has ended with a short-term truce reached last Friday, sending roughly 800,000 government employees back to work this week. While certainly not the first shutdown, this was the longest shutdown in US history, dominating headlines and lasting 35 days.
The return of volatility was the hallmark of the fourth quarter (Q4) as equity and fixed income markets were buffeted by mid-term election results, international trade politics, central banking activity, and uncertain domestic and global economic activity.
The longest government shutdown in American history ended last week when President Donald Trump signed a bill last Friday reopening federal agencies that had been shuttered since Dec. 22. The nation – particularly the 800,000 federal workers impacted by the shutdown – rejoiced, but only for a minute.
Last week saw government dysfunction on full display in several different countries. While politicians in the UK and US continued to make headlines, expectations for lower economic growth emerged in a report from the International Monetary Fund.