Asset Class Reports
Canterbury Review: Fourth Quarter 2019
Strong Performance Leads to Record Highs
- U.S. equities rose in the fourth quarter, reaching all-time highs. The de-escalation of the U.S.-China trade war calmed markets and boosted trade-sensitive stocks as the two countries indicated plans to sign a “phase one” trade agreement in January.
- International equities moved higher, boosted by improved U.S.-China trade relations, a Brexit-related election in the U.K. that increased the likelihood of a negotiated withdrawal from the European Union, and a weaker U.S. dollar. Emerging market equities posted the strongest returns amongst global equity benchmarks. The limited trade deal between the U.S. and China as well as a planned rollback of trade tariffs helped drive returns.
- U.S. interest rates moved gradually higher as the Fed communicated a “wait-and-see” approach to implementing further rate cuts. U.S.-China and Brexit resolutions also resulted in developed country rates moving higher as investors rotated into riskier assets. Emerging market bonds benefited from strong currency returns and constructive economic growth.
- Corporate debt performed well as risk-on sentiment led to tighter spreads. High yield outperformed investment-grade bonds as investors allocated to lower quality credit.
- Energy largely performed well as production cuts from OPEC and easing U.S.-China tensions resulted in a supportive demand environment for oil.
To view the fourth quarter reports, click on the links below: