The strong rally in global equities in the fourth quarter capped a year of robust gains across global equity markets as reflected in FTSE Russell index performance. This included a more than 31% return for the US large-cap Russell 1000® Index with similar positive returns across other developed and emerging markets equities.
Will 2020 show similar gains for global markets? As always, there is no crystal ball into the future for the market, but FTSE Russell's Alec Young, managing director of global markets research shares perspective on factors that may impact US and global equity market returns in the new year.
“Improving optimism over global growth, US-China trade progress and an accommodative global monetary backdrop buoyed risk appetite in Q4, propelling US and international equity indexes to record highs. Though 2019 was an exceptional year for financial markets, returns in 2019 were flattered by a low starting point after Q4 2018’s vicious declines.
"Looking ahead to 2020, the global economic outlook must continue to improve if risk assets are to remain in favor," says Young."Investors will be watching for more improvement in global leading economic indicators coupled with further US-China trade progress and signs of a soft Brexit. In addition, the identity of the US 2020 Democratic Party nominee will be closely watched as will the Fed, ECB, BOJ and PBOC for signs of continued monetary policy accommodation. Lastly, geopolitical uncertainty always has the potential to cloud economic visibility and therefore can never be completely ruled out as a source of potential volatility.”
Get more insights from Alec Young and the FTSE Russell global markets research team in their latest FTSE Market Maps monthly performance report.
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