Clear Harbor Quarterly Market Outlook
Clear Harbor Outlook for 2019
After years of advances, global equity markets ended 2018 with the stinging reminder that they can still reverse on a moment’s notice. A year that began amidst historically low inflation, accelerating economic growth and expanding equity valuations ended with an eruption in volatility and the meaningful outperformance of broad fixed income benchmarks—precisely the reverse of what most strategists had predicted.
Record-breaking swings in December promise to make this the worst year for the S&P 500 since 2008, with a decline of 5.2% through December 28th. Despite a rally into the fall, global equity markets neared year-end off 9.6%; largely in response to the relative strength of the U.S. dollar, gold faltered by 1.9%. In contrast, the broad benchmark for U.S. bonds ended the year off just 0.2%.