QUARTERLY COMMENTARY Q4: FOURTH QUARTER REVIEW

QUARTERLY COMMENTARY Q4: FOURTH QUARTER REVIEW

Tue, January 01, 2019

QUARTERLY COMMENTARY Q4: FOURTH QUARTER REVIEW

Sentiment turned sharply negative in the 4th quarter, setting the stage for 2018 to conclude with near double-digit losses for global equities. The market downturn was in sharp contrast to U.S. economic momentum that remained strong for much of the year. Second and third quarter U.S. GDP growth represented the strongest back to back quarters since 2014. Jobs continued to be plentiful, as the unemployment rate declined and the workforce participation rate rose. Wages showed signs of positive momentum, while inflation remained close to the levels targeted by the Federal Reserve. Corporate tax cuts boosted results for U.S. companies already benefiting from robust growth. The U.S. was the clear economic leader, as challenges faced by China and Europe made last year’s synchronized global growth environment a distant memory. In response to strong economic growth, U.S. interest rates rose for much of the year. The U.S. dollar rose relative to the Euro and emerging markets currencies.