What did 2017 bring?
2017 was full of surprises, ups and downs, and geopolitical tensions in the global markets. Given all these ups and downs, can we still say that 2017 was a good year for global markets?
The year started with Donald Trump’s inauguration as 45th President of the United States, which brought uncertainty not only to the States but also in the global markets. Europe also saw elections create a populist movement across major countries in 2017. We also saw the continued effect of Britain’s exit from the European Union this year. Global market performance fluctuated with growing tensions between the US and North Korea and proposed tax reforms.
Then again, some economies like Nigeria, Argentina, Turkey, and Hong Kong outperformed the US stock market as shown in the chart below. Emerging markets grabbed investors’ attention this year.
Global stock market performance
The three major indexes that track global markets showed growth in 2017, according to the chart below. As of December 25, 2017, the MSCI ACWI Index (ACWI) had risen 21.2% year-to-date (or YTD). The index tracks 85% of the global equity market, covering large-cap and mid-cap companies across 23 developed markets and 24 emerging markets. Meanwhile, the MSCI World Index (URTH) rose ~20% YTD. It tracks large-cap and mid-cap companies across 23 developed markets with US markets having the highest weight[1. 59.4% as of November 30, 2017]. The US market as represented by the S&P 500 Index has been soaring since the elections on the hopes of a strengthening economy. The S&P 500 Index (SPY) (SPX-INDEX) has risen 19.8% YTD.
Emerging markets (EEM) weren’t far behind either this year. In fact, emerging markets outperformed the S&P 500 with a rise of 32.3% YTD. The MSCI Emerging Markets Index (VWO) tracks large-cap and mid-cap companies across 24 emerging market countries.
This series will discuss various global political events and the best-performing markets this year. At the end, we’ll look at the global market outlook for 2018 and discuss what could be the best-performing countries in each continent. Let’s start with North America.