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Market Update – January 2020

Market Update 2020

Global stocks (-1.3%) kicked off the year by struggling with losses across the board. Emerging market stocks (-4.7%) suffered the most while U.S. large cap stocks (0.0%) were the best performers by posting a flat return. Fixed income asset classes were positive with international bonds (+2.1%) and TIPS (+2.1%) the strongest performers. Alternative asset classes were mixed with commodities and managed futures falling 7.4% and 2.7% for the month, while reinsurance and REITs gained 0.9% and 0.8%, respectively.

Economy

  • Unemployment held steady at 3.5% in December.
  • The pace of housing starts in December jumped 17.0% from the previous month.
  • The initial estimate of Q4 GDP growth came in at a solid 2.1%.

Stocks

  • U.S. large cap stocks (0.0%) were flat for the month which led all equity asset classes. U.S. small value stocks (-4.5%) were the worst performing domestic equity asset class.
  • Both in U.S. and international markets, small cap and value stocks underperformed their large cap and core counterparts.
  • Emerging market stocks (-4.7%) struggled as concerns about the coronavirus outbreak in China made headlines around the world.

Bonds

  • Bond returns rose as investors looked for safety as stocks fell. U.S. intermediate-term bonds gained 1.4% while U.S. short-term bonds had a modest return of 0.3%. TIPS were the strongest performers of U.S. bonds with a gain of 2.1%.
  • International bonds continued to perform well with a 2.1% return for the month.

Alternatives

  • Global REITs (+0.8%) and reinsurance (+0.9%) both posted gains for the month while commodities (-7.4%) and managed futures (-2.7%) fell.

Economic and Market Commentary

Read our latest Economic and Market Commentary for Market Returns Year-To-Date, Market Returns Longer Term Annualized, Economic Indicators, and an Appendix.

Download Commentary


Source: Morningstar Direct. This is intended for informational purposes only and should not be construed as legal, investment or financial advice. Please consult your legal, investment and financial professionals regarding your specific circumstances.

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  • Market Update – January 2020