Citi Personal Wealth Management

A Gigantic January

Monthly Market Snapshot: January 2019

Highlights

Global equities rebounded sharply in January. In the United States, the S&P 500 jumped 7.9% and the NASDAQ powered ahead with a 9.2% gain. Outside of the U.S., performance was also strong with European, Japanese, and Emerging Market shares rallying 5.7%, 6.1%, and 8.7%, respectively.

A more cautious Federal Reserve, a more optimistic view on U.S. – China trade relations, and strong employment reports helped markets to rebound. Moving forward, equity market performance will likely depend on the depth of the global economic slowdown. We remain in the camp that expects a slowdown, not a recession. As such, we believe that equity markets still have some room to run before peaking.

Citi’s Private Bank’s Global Investment Committee (GIC) decided to raise its overweight to global equities from +1.0% to +2.0%. Increased allocations were made to U.S. large-cap and emerging Asia stocks while reductions were made to continental Europe. A reduction in the cash position was used to fund an increase in global fixed income exposure – bringing the global fixed income weighting to neutral. Increases were made to government guaranteed and short- and intermediate-term U.S. investment grade credit.