Quarterly Commentary is a quarterly view of the equities, fixed income and hedge fund markets from our Family Management specialists.
The S&P 500 closed the first quarter of 2020 down 19.6%, its worst three-month start to a calendar year on record. After closing at record highs on February 19th, the S&P ended March 23.5% below the all-time high levels. The magnitude and speed of the sell-off was unprecedented as investors quickly wrestled with the reality
The alternative sector ended the year on a positive note as the HFRI Fund-of-Funds Composite Index rose by 2.1% during the fourth quarter and 8.3% for 2019, which is the index’s best performance since 2013. Global markets closed the year on a positive note as the Federal Reserve cut interest rates by 25 basis points
While the equity markets roared ahead, the US treasury curve steepened during the fourth quarter. Short term yields in the two-year range fell, while longer term yields rose. The Federal Reserve drove these movements in rates as the markets priced the expectation of continued low overnight rates. The 10-year treasury yield rose 25bps from 1.66%
Fueled by a Federal Reserve intent on keeping interest rate levels intact despite any changes in inflation, equities rose 9.1% in the fourth quarter of 2019 as measured by the S&P 500. This gain was predominantly driven by expansion in the price-to-earnings multiple of the S&P 500 stocks from 19.6x at the end of the