Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury OCIO Review.
The spike in market volatility and dramatic reversals in the last few months of 2018 was an experience that investors had not had for a number of years. A series of negotiations during the summer between OPEC members, the U.S., Russia, and other oil-producing countries resulted in production increases. As the year came to a close, a number of short-term resolutions were put in place: Teresa May delayed the mid-December Brexit vote, OPEC agreed to cut oil production, President Trump and President Xi agreed to a 90-day trade truce, the Bank of Japan and Bank of England decided to keep rates on hold, and the Italian government struck a deal on budget plans with the European Commission. In addition, the U.S. government entered into a partial shutdown amidst dispute over the funding of the southern border wall. The prospects of recession seem lower in the near term in the absence of any area of looming asset bubbles, but at the same time, should trade discussions fail among the major world economies, the repercussions may be serious for countries whose GDP are more greatly dependent on external trade.