The Market Sees Better Days Ahead
Global equity markets delivered strong absolute returns again in the fourth quarter, benefiting from improving expectations that 2021 would be a better year due to the availability of COVID-19 vaccines and a rebound in corporate profits. The MSCI All Country World Index (ACWI) returned 14.68% in the quarter and 16.25% for the full year.
Despite quickly growing COVID-19 caseloads across many parts of the world and the spread of a new strain of the virus in some regions, economic statistics generally exceeded expectations in Q4, with Japanese exports being firmer than expected and China’s November factory activity expanding at its fastest pace in more than three years. Australia’s job growth grew well above expectations as its economy reopened, and German business sentiment unexpectedly improved in December despite strict lockdown measures. After U.S. GDP surged 33.1% in Q3—following its steepest decline in recorded history in Q2—U.S. GDP growth was expected to moderate significantly in Q4 as the resurgence in COVID cases and new lockdowns impacted employment growth and retail purchases in the period leading up to the holidays.
The commentary is the opinion of SGA. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
Past performance is not indicative of future results.
All investments carry a certain degree of risk, including possible loss of principal.
Index definitions: S&P 500 measures performance of 500 of the largest U.S. companies. MSCI AC Asia Pacific measures large and mid-cap equity performance of developed and emerging markets countries in the Asia Pacific region. MSCI All Country World (ACWI) measures equity performance of developed and emerging markets. MSCI EAFE® measures developed foreign market equity performance, excluding the U.S. and Canada. MSCI AC World ex U.S. measures equity performance of developed and emerging markets, excluding the U.S. MSCI Emerging Markets measures equity market performance in global emerging markets. MSCI Europe measures equity market performance of Europe’s developed markets. MSCI Latin American EM measures equity performance of Latin America’s emerging market countries. Indexes are free float-adjusted market cap-weighted and calculated on a total return basis with dividends reinvested.