Equity markets were strong in the second quarter, rebounding from the sharp drop at the end of the first quarter. On a year to date basis, despite considerable volatility, developed markets are relatively flat. The overall economic backdrop continues to be supportive, with corporate earnings rising, which should be reflected in stock prices over time.
The fourth quarter of 2018 saw large declines in equity markets globally and a sharp upswing in volatility. There have been several large market pullbacks over the past decade and in each case markets gradually recovered and then went on to new highs.
Global equity markets were highly volatile in the third quarter with a notable divergence. While the US markets continued to exhibit resiliency, the emerging markets fell sharply as global trade policies and rising rates continue to weigh in on global growth.