As 2019 draws to a close November saw another broadly positive trend for global equity markets. In the U.S. certain metrics including unemployment came in a little better than expected. In Europe, though economic data remains largely muted, it was not as bad as feared. Trade tensions between the U.S. and China may also be easing to some degree, although no formal resolution has been reached. Overall for November, most equity markets saw positive trends, with the main exception of Latin America as economic and political risks weighed on the region.
Overall for 2019 so far, the worst fears of global economic weakness have not yet come to pass. Still, corporate profit growth has generally been soft. As such, the impetus for the next leg of growth into 2020 is unclear, especially at a time when stock valuations, notably in the U.S. appear elevated. Geopolitical risks and the U.S. Federal Reserve’s current tendency to step back from the easing that has helped bolster markets for much of 2019 is also a concern.
So far for 2019, the worst fears concerning economic growth have not come to pass, and that together with the actions of central banks, has driven markets higher. However, risks remain for the apparently sluggish global economy.