Recapping 2019
Investors enjoyed healthy gains across all manner of financial assets in 2019. The gloom that had permeated markets in late 2018 lifted as the Federal Reserve pivoted to a more accommodative monetary policy while the U.S. economy maintained a reasonable pace of growth. A long-awaited thaw in trade tensions provided an added boost to markets in the fourth quarter.
U.S. Equities: Rebounding decisively from losses in the prior year, U.S. stocks in 2019 produced their strongest returns since 2013. Market strength was broad-based, with all major indices advancing more than 20% on the year. The S&P 500 index posted an impressive total return of 31.5%, while small cap stocks also fared well (Russell 2000 index, 25.5%). Similarly, both growth stocks and value stocks generated robust returns, with the former once again besting the latter (Russell 1000 Growth index, 36.4%, vs. Russell 1000 Value index, +26.5%).
International Equities: International stocks trailed U.S. stocks’ blistering pace in 2019 but still posted healthy returns in their own right. Shaking off slowing global economic growth and trade tensions, both developed and emerging market stocks bounced back from double-digit losses in 2018 with strong gains in 2019 (MSCI EAFE index, 22.0%, MSCI Emerging Markets index, 18.4%, both in USD terms).
Fixed Income: Bonds produced solid returns in 2019 (Bloomberg Barclays U.S. Aggregate Index, +8.7%) amid declines in both interest rates and corporate bond spreads. The yield curve briefly inverted during the summer before climbing back to positive territory in September.
REITs: Supported by both declining interest rates and the rally in equities, REITs produced hearty returns in 2019 (FTSE NAREIT Equity Composite, 26.0%).
Commodities: Commodities recorded their strongest gains in three years, boosted by both energy (the price of West Texas Intermediate crude oil rose 35% to $61.06 per barrel at year-end) and precious metals (gold rallied 19% to close the year at $1,523 per ounce).
Look for our upcoming webinar:
Join us on January 15, 2020 at 11:00 ET for Gallagher’s Quarterly Financial Markets Review.
This webinar will address:
- Key events that impacted markets in Q4 of 2019
- The performance of different capital markets during Q4
- Gallagher’s views on the current economic and market environment
|
As of December 31, 2019 |
Month-to-Date |
Quarter-to-Date |
One-Year |
|
MSCI All Country World |
3.52% |
8.95% |
26.60% |
|
S&P 500 |
3.02% |
9.07% |
31.49% |
|
Russell 2000 |
2.88% |
9.94% |
25.52% |
|
MSCI EAFE |
3.25% |
8.17% |
22.01% |
|
MSCI Emerging Markets |
7.46% |
11.84% |
18.42% |
|
FTSE NAREIT |
-0.60% |
-0.76% |
26.00% |
|
Bloomberg Commodity |
5.04% |
4.42% |
7.69% |
|
Barclays U.S. Aggregate |
-0.07% |
0.18% |
8.72% |
Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.