The momentum for the first three months of the year carried over into this quarter. Stocks largely brushed off the growing list of concerns to have their best first half of the year since 1998. Global stocks have not reached all-time highs like their US peers, but are only 6% from previous highs. The return of central bank stimulus served as a spark for the markets.
Global stock markets posted their best quarterly performance since 2013. This quarter’s rally was largely a snap back move after a difficult 2018. The rally this quarter was helped by a more accommodative tone from central bankers around the world, global economic data showed improvement (from low expectations) and hopes that a US and China trade deal would be concluded in the near term.
Global stock markets pulled back this quarter. Stocks started the year off strong but sold off in February and March. This ended the streak for positive consecutive positive months at 13. The sell off can be attributed to trade tensions, a slumping US Dollar and economic data that missed expectations. Global equities fell almost 5% in local currency.
Global stocks hit two milestones in 2017. First, international stocks outperformed US stocks (S&P 500) for the first time since 2012. Second, international stocks did not have a single down month this entire year. This was the first time in the history of the index that it happened. 2017 was quite a year!
International markets have had their best first half performance since 2009. The rally was driven by a synchronized global economic recovery, better than expected corporate earnings and reduced political risks.
International markets had an impressive start to the year. All major developed markets were positive for the first quarter and global indexes outperformed the US markets. The US Dollar weakened in the quarter which helped lift over all returns. The top performing sectors were technology, consumer staples and consumer discretionary. The energy sector sold off in the quarter.
Globally stocks finished the year on a downbeat note with a slight decline in the fourth quarter. US stocks outperformed their global peers by a healthy margin in 2016. Some of the post US election rally did find its way into the global stock markets, but a stronger US Dollar neutralized much of the returns.
Global markets had their best quarterly returns since 2013 during this third quarter. Stocks outside of the US outpaced the S&P 500 by 2.5% beating the US market for the first time since Q1 of 2015. Investors immediate fears about the BREXIT vote repercussions were set aside and their attention was turned towards actions from central bankers around the world.
The United Kingdom’s (UK) vote to leave the European Union (EU) set off a shock wave across the global political establishment and global financial markets. The outcome of the BREXIT vote was unexpected and global stock markets sold off sharply in the days after the June 23rd referendum.