Monthly Market Snapshot: December 2020

A monthly update on equity, fixed income, currency and commodity markets.

Views expressed are those of the authors and are subject to change. Other teams may hold different views and make different investment decisions. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.

Equities

Global equities (+3.9%) rose in December, ending the year with a 14.8% gain. Vaccine rollouts, central bank support, and government stimulus helped drive markets higher, despite a surge in COVID-19 infections across many areas of the world. The US government agreed on a pandemic relief package that extends many of the Coronavirus Aid, Relief, and Economic Security (CARES) Act support measures, including renewed direct payments to households and an extension of unemployment benefits. The European Central Bank (ECB) expanded its massive monetary stimulus program by €500 billion, as a new wave of lockdowns weighed on the eurozone’s economic recovery. The European Union (EU) and China struck an agreement that will provide European companies greater access to China, while the US government strengthened its recent sanctions on companies with links to the Chinese military. The UK and the EU secured a trade deal, setting the terms for a post-Brexit future and ending four years of political negotiations that began with the UK’s 2016 referendum on EU membership.

US

US equities (+3.8%) ended a tumultuous year at a record high, with surging stock prices and vast equity inflows driving valuations to their highest level in years. Despite concerns about the slower-than-expected rollout of vaccines and anxiety that US economic growth could suffer during the winter months due to the ongoing rise in COVID-19 cases, markets were bolstered by optimism that vaccines will support a broad reopening of the US economy in 2021. The US government unveiled a long-awaited stimulus package, worth approximately US$900 billion, which extends unemployment benefits into March, provides direct payments to US households, and supplies funding for small businesses, schools, and vaccine distribution. The Federal Reserve (Fed) committed to purchasing at least US$120 billion of US government debt per month until the economic recovery realizes substantial progress, predicting that interest rates will remain near zero until at least 2023. Merger volume in the fourth quarter was on track to be…

To read more, please click the download link below.

RECOMMENDED FOR YOU

<span>Top of Mind</span> Never assume and other tips for 2021
Multi-Asset Strategist Adam Berger stress tests the consensus views on four key issues: rising interest rates, high equity valuations, US market leadership and the impact of slower globalisation on China's growth.
February 2021
Top of Mind Never assume and other tips for 2021
,
Monthly Market Snapshot: January 2021
A monthly update on equity, fixed income, currency and commodity markets.
February 2021
Monthly Market Snapshot: January 2021
,
From globalisation to a “zero-sum” game
Globalisation has increasingly begun to backpedal amid rising populism and a renewed emphasis on global competition over cooperation. Fixed Income Portfolio Manager John Soukas and Investment Director Chris Doherty discuss the implications and the role of active management in this shifting landscape.
February 2021
From globalisation to a “zero-sum” game
,
A new inflationary regime: why the next decade could look different from the last
We explore why the risk of structurally higher inflation may be the highest it has been in decades and profile the key investment implications this presents.
January 2021
A new inflationary regime: why the next decade could look different from the last
,
Rewriting the recovery playbook
Multi-Asset Strategist Nick Samouilhan and Investment Directors Andrew Sharp-Paul and Matthew Bullock outline a proposed new playbook for navigating an economic recovery unlike any other.
January 2021
Rewriting the recovery playbook
,
Surviving the stress test: companies adjusting to the new landscape
The pandemic has forced companies around the world to revisit their business plans and processes. Michael Carmen, co-head of Private Investments, moderates a discussion with three CEOs about how they have been navigating this time of crisis.
January 2021
Surviving the stress test: companies adjusting to the new landscape
,
Taking the mystery out of multi-asset credit investing
Perhaps the most confounding question of all: How does one even measure “success” in such a heterogeneous investment realm? Fixed Income Investment Directors Anand Dharan and Amar Reganti lay out a robust framework for doing so.
January 2021
Taking the mystery out of multi-asset credit investing
,
Global ESG Research Update — Wellington joins Net Zero Asset Managers initiative
We explain our decision to join the Net Zero Asset Managers initiative as a founding member. We also provide an update on our ESG engagement and proxy voting activity in the quarter.
January 2021
Global ESG Research Update — Wellington joins Net Zero Asset Managers initiative
,