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Global Performance for the Third Quarter 2019

Global Performance for the Third Quarter 2019

Defensive asset classes outperform as global markets show modest returns


The U.S. stock market indices increased modestly in the third quarter, propelling the S&P 500 and the DJIA to their best three-quarter starts to the year since 1997 and NASDAQ to its best three-quarter start since 2013 – all while further extending what is the longest bull market on record.

The S&P 500 is just a hair shy of its all-time high reached on July 26th, but if you look at the performance over the past year, it has moved a paltry 2%, mostly as a result of the selloff in stocks toward the end of 2018.

Global markets had a lot to digest in the second quarter and there was one huge theme influencing the upward momentum: shifting global central banks’ policy (namely the Federal Reserve and the European Central Bank) with respect to further monetary stimulus (i.e., cuts to short-term rates).

Markets Around the World Muted

The modest performance during the third quarter was not confined to the U.S., however, as global markets were mostly flat as the Federal Reserve and the European Central Bank continued to cut rates. Further, the quarter was pockmarked with economic data that underscored the premise that a global economic slowdown is occurring.

Asset Class & Style Returns

The third quarter saw a flight to quality and the value and defensive styles outperform. REITs occupy the top spot for the third quarter and YTD, but during the third quarter, investors also saw value outperform growth and large caps outperform small caps.

Source: Barclays, Bloomberg, FactSet, FTSE, MSCI, J.P. Morgan Asset Management. DM Equities: MSCI World; REITs: FTSE NAREIT All REITs; Commodities: Bloomberg UBS Commodity Index; Global Agg: Barclays Global Aggregate; Growth: MSCI World Growth; Value: MSCI World Value; Small cap: MSCI World Small Cap. All indices are total return in local currency. Data as of September 30, 2019.

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