After a tumultuous 2018, the start of 2019 saw rapid stock market recovery. In fact, compared to 2017, when only eight days saw declines or increases of 1% or more, 2018 had almost 64! We also saw the worst December since the thirties, with a negative monthly return of 9.2% on the S&P 500.
But, despite these movements and an economic slowdown (notably in Europe), we still are not seeing signs of a recession. Most advanced indicators remain positive (yield-rate curve, inflation, employment, etc.) and the market almost recovered all losses from last December.
There are still some risk factors, notably the trade war between China and the United States and Brexit in Europe, but perhaps we’ll see favourable trends by the summer.
Thus, we are remaining positive and, in the absence of a recession, let’s stay optimistic, particularly overseas, where evaluation metrics and risk-return reports continue to be of interest.