Inside This Edition …
Subscribe to our newsletter here.
The Year No One Saw Coming
A mere 12 months ago, the U.S. equity markets were near the bottom of a short-lived bear market with the S&P 500 falling 19.8% from its high point and other indices like the Nasdaq and the Russell 2000 Small Cap falling well over 20%1. Economic sentiment was quite negative with pundits forecasting slowing earnings for public companies and the trade war with China dragging on expectations. The R Word (Recession) was being discussed incessantly in the financial media. And then … the economy and the market marched on.
Sometimes markets can be stubborn, and this year they simply shrugged off all the pundits. The trade war did not push the economy into recession, earnings were better than expected, and jobs outperformed estimates for 2019 even while wages were rising. By April, the markets had broken into new high ground. In May and June, the Trade War Tariff headlines caused a small maelstrom with the S&P 500 falling about 7.5%. But by October, the market was again making new highs as the breakout continued. As we stand on the brink of a new decade, the U.S. market is over 28% higher, international markets are well over 15% higher, and even U.S. bonds managed to turn in a reasonable performance in 20192.