Commentary

2018 was a challenging year in global financial markets. Stocks declined -16% in Europe, -14% in emerging markets, and -4% in the US1. The Fed raised rates 1.0% while investment grade and low-grade bond borrowing costs increased 0.60% and 1.83%, respectively2. Global output in most major economies appeared to slow. The main shreds of good news came from the US where retailers enjoyed buoyant holiday sales and unemployment remained at multi-decade lows. Yet political polarization, government shutdown, and year-end market volatility tempered the general mood.