The coronavirus outbreak represents a significant shock to both supply and demand in China and is likely to have repercussions for both Chinese and global economic growth.
Portfolio Managers Matthew McLennan, Kimball Brooker
Global equity markets ended a robust 2019 on a high note, with a strong fourth quarter rally adding to already impressive yearto- date gains. Performance over the last several months of the year was driven mainly by sectors of the market, such as technology and health care, thought to have good long-term growth prospects.
In fixed income markets, solid fourth quarter returns capped off what was a remarkable year across the complex. As in the equity markets, the credit rally appeared buoyed by central banks’ return to highly accommodative policy, which repressed volatility and supported bond returns across the quality spectrum.
With a new year upon us, we remain in uncharted equity and economic waters. In the US, the current bull run has been the longest on record, as has the ongoing economic expansion. With unprecedented levels of global monetary stimulus, however, questions remain as to how much of the equity market’s rally over the past 10-plus years should be ascribed to central bank liquidity.