Recent Monthly Market Updates
Summaries of past months' key market events from Pax World's Chris Brown.
- Thinking January through - February 2014
- In the long run... - January 2014
- Short-term pain, long-term gain - December 2013
- Sign, sign, everywhere a sign - November 2013
- The waiting is the hardest part - October 2013
- On a clear day you can see recovery - August/September 2013
Fourth Quarter 2013 Market Review and
2014 Market Outlook
By Pax World Chief Investment Strategist, Chris Brown
Most financial reviews of 2013 lead with news of investment returns in the 30% range delivered by U.S. equity markets (See the table of Key Stock Index Returns on page 2 of PDF). But, the sense of good fortune at year-end cannot fully diminish the issues investors confronted at the outset of the year because they still resonate and still figure, albeit to a lesser degree than a year ago, in our generally positive outlook for 2014.
Early 2013 concerns included the debt ceiling1 debate in the U.S. Congress and the potential effects of sequestration’s2 government spending cuts on a struggling economic recovery. Europe’s ongoing sovereign debt-related austerity programs gave rise to currency alarms, civilian unrest and government tumult in places like Greece, Turkey and Italy. Outcomes were uncertain for Japan, where aggressive quantitative easing3 (QE) and monetary policy drove higher stock market returns, and China, where government policymakers sought to move towards a more open and consumer-based economy. Add to these issues the fact that the Barclays U.S. Aggregate Bond Index4 was on its way to its first negative return since 1999 at -2.02% for the year-ended December 31, 2013.
To read more download the full market outlook here
1Debt ceiling is the maximum amount of monies the United States can borrow. The debt ceiling was created under the Second Liberty Bond Act of 1917, putting a “ceiling” on the amount of bonds the United States can issue.
2Sequestration passed on March 1, 2013 in response to a 2011 law designed to reduce the government’s budget defi cit by $85 billion.
3Quantitative easing is monetary policy used by central banks to stimulate a national economy. Typically, central banks implement quantitative easing by buying financial assets from commercial banks and other private institutions, injecting a pre-determined quantity of money into the economy.
4The Barclays U.S. Aggregate Bond Index is a broad based index that represents investment grade bonds being traded in U.S. One cannot invest directly in an index.