2017 Clear Harbor Quarterly Market Outlook
CLEAR HARBOR OUTLOOK: Q2 2017
March 30, 2017
The year started with equities continuing the steep advance that marked the final weeks of 2016. U.S. equities gained between 2.0% and 6.1%, international developed markets averaged 8.8% and emerging market equities rose 13.3% — all well in excess of historic first-quarter average returns. The primary U.S. fixed income benchmark returned 0.73% as credit spreads remained firm, and sovereign yields trended higher in the U.S. and across a broad swath of developed and emerging markets—all encouraging signs of economic momentum.
Clear Harbor 2017 Outlook
December 23, 2016
As we peered ahead one year ago, our general view was that:
- earnings would underperform relative to Bloomberg consensus analyst estimates;
- the Federal Reserve would remain more dovish than even its own board anticipated, ultimately delivering just one rate hike (rather than the three they had predicted);
- global growth would prove lackluster; and
- structural impediments to growth would continue to weigh on investor sentiment, consumer confidence and returns across major asset classes.
While these core views were validated, the presidential election in the U.S. forced a marked shift in investor sentiment, sending equity prices significantly higher into year-end. To put this in context, the S&P 500 gained 6.6% in the 11 months leading up to Election Day—then rallied another 6% in the weeks following Donald Trump’s surprise victory.