Market volatility, economic uncertainty, political tensions… and another year comes to an end with markets hitting new highs. So how did we reach this point?
As we started the year, we saw equity markets making gains in the first quarter, rebounding from a weak ending to 2018 as concerns over the China-US trade dispute eased and major central banks grew more accommodative (the term accommodative here refers to making money less expensive to borrow or to encouraging more spending within the economy). Stocks and high yield corporate bonds each enjoyed their strongest quarter for several years. Crude oil prices rebounded from a sell-off at the end of 2018, as production cuts from OPEC and other oil producers, together with the implementation of US sanctions on Venezuela, served to tighten supply.
Shares in developed markets gained during quarter two, despite a steep fall in May due to concerns over the US-China trade war. Stock markets were supported by increasingly accommodative central banks and hopes of some progress in trade tensions by the end of June. UK shares performed well over the quarter, despite ongoing Brexit-related uncertainty and the resignation of Prime Minister Theresa May in early June.
It was a mixed time for shares in quarter three, with developed markets making small gains while emerging markets fell. The US-China trade dispute rumbled on, as did global growth concerns, but central banks remained supportive. Financial, Utility and Energy stocks led the market higher in the quarter.
Markets remained resilient into quarter four, hitting new all-time highs as global central banks remain accommodative, and expectations of a trade deal remain elevated. Sterling has strengthened into year-end with growing confidence in the political system ahead of UK elections in mid-December and a resolution to the Brexit stand-off. Market commentators remain upbeat for the year ahead, 2020, as equity inflows and positioning are still light.
The dawn of a new year is always a good time to reflect on your investments and objectives going forward. We look forward to sharing our outlook in January and wish you a Happy Christmas and prosperous New Year.
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Ed Murray is Senior Stockbroker with Cantor Fitzgerald.
To speak with a Portfolio Manager or Account Executive today, phone the Cantor Fitzgerald dealing desk on 01 633 3633.