Citi Personal Wealth Management

A Merry (But Wary) March

Monthly Market Snapshot: March 2019

Highlights

Global stocks climbed 11.6% in the first quarter of 2019 – the strongest quarterly return since 2010. In the U.S., the S&P 500 returned 13.1% for the quarter while the Dow Jones gained 11.2%. Outside of the U.S., both Europe and Emerging Markets returned about 9.6%. Though we should acknowledge that the gains are coming on the back of rising global growth concerns and a 13.1% drawdown in global equities in the fourth quarter of 2018.

The recent rally can largely be attributed to two factors: 1) easing U.S. – China trade tensions and 2) a dramatic shift from the Federal Reserve. As recent as last September, the Fed was projecting three additional rate hikes in 2019. Now, the Fed is projecting zero. This dramatic shift has increased the odds that the U.S. business cycle may be extended.

Citi’s Private Bank’s Global Investment Committee (GIC) is maintaining its overweight to global equities (+2.0%). Key overweights include allocations to both U.S. large-cap and emerging market stocks (particularly emerging Asia). The Committee remains neutral on global fixed income, but sees opportunities in both intermediate-duration U.S. investment grade and emerging market debt.