Citi Personal Wealth Management

August Appreciation

Monthly Market Snapshot: August 2018

Highlights

As summer comes to an end, we can probably all appreciate the time-off that we normally take in August to “re-charge our batteries.” The U.S. equity market also appreciated this August with the S&P 500 rising by 3.0% during the month and hitting a record high of 2,914 on August 29th. On a global scale, equity markets posted just a 0.6% gain as emerging markets continued to struggle (falling 2.9%). Thus far, U.S. investors have been more rewarded for “staying home” than “going global.” However, with many potential negatives already priced in, any positive developments will likely be more beneficial to non-U.S. equity markets.

Away from equity markets, global growth remains healthy with real gross domestic product (GDP) likely to expand by about 3.4% in 2018 and 3.3% in 2019. We expect global growth to begin to slow heading into 2020, but to remain positive (Citi’s forecast for U.S. real GDP growth in 2020 is 1.8%).

The Citi Private Bank’s Global Investment Committee (GIC) remains modestly overweight global equities with a +1.5% active weighting (the fixed income side of the portfolio carries an underweight of -1.5%). Preferred equity market regions include Germany and France and emerging markets (particularly Asia). On the fixed income side, the GIC prefers short-term U.S. debt and inflation-linked debt.