First quarter 2019 capital markets outlook

June 6, 2019

Diverging global economic growth, nuanced monetary policies, and ongoing geopolitical turmoil has resulted in increased uncertainty in the global capital markets.

  • Systemic Risk has been elevated since October 2018, but has recently started to decline.
  • The price of the U.S. stock market relative to ten-year average earnings remains above its historical average (29.9x versus 16.9x).
  • Developed international and emerging market stocks are trading at lower valuations than U.S. stocks.
  • At 2.4%, the the yield on the ten-year Treasury declined, to the surprise of many investors.
  • As of March 31st, spreads for high yield corporate bonds (4%) were below their historical average.