2018 was the S&P 500’s worst year (-6.2% YoY) since 2008, while the MSCI World Equity Index dropped 10.4% YoY. For the first time in years, all major global asset classes produced negative real returns. Emerging markets (EMs) bore the brunt of the risk-off environment, with the JSE All Share Index closing 2018 with an 11.5% negative total return (over four years it has yielded a paltry 4.6% annualised total return). Numerous factors conspired to create negative global sentiment, especially in Q4 2018. Global growth prospects, and the related central banks’ policy responses, are typically the biggest market drivers. While growth should slow this year (we see a circa 3.5% 2019 global growth rate as enough to drive reasonable earnings growth), market behaviour suggests a far worse outcome, probably due to a lack of confidence in US President Donald Trump’s antics. After being a positive market catalyst in 2017, 2018 was the opposite and the US stock market is now at levels below those when dramatic tax cuts were implemented.
Subscribe to our free newsletter
Stay at the forefront of financial advisory excellence with MoneyMarketing's weekly insights. As a professional adviser, you'll receive carefully curated content that enhances your practice and client relationships without cluttering your inbox. Our commitment to delivering only relevant, actionable intelligence helps you make informed decisions that drive your business forward. Join our community of leading financial professionals today and transform your practice with our complimentary newsletter—because your success is our priority.
