Global Markets Have Started 2018 on Strong Note: What’s Next?



Global equity market’s performance

In the previous part of this series, we analyzed the performance of the US market (SPX-INDEX) (SPY). In this part, we’ll look at the performance of the global equity market (ACWI) (VTI).

Although the global equity market had the best start to a new year that it has seen since 1988, investors should be cautious, according to Pimco. The MSCI All-Country World Index (ACWI), which tracks the performance of the global market, rose 4.8% between January 2, 2018, and January 18, 2018.

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Both developed nations (EFA) and emerging nations (EEM) showed strong performances in the beginning of 2018. Emerging nations also showed a strong rally in 2017. The iShares MSCI Emerging Markets ETF (EEM), which tracks the performance of the emerging markets, rose 37.2% in 2017. It rose nearly 6.1% between January 2, 2018, and January 18, 2018.

PIMCO’s view on the global markets

In spite of a strong rally in the global equity market, Pimco warned investors to be cautious in regards to market movement. Investors around the world are cutting down their cash position and investing significantly in risk assets, which is making the asset management firm worried about the global equity market. Analyst Joachim Fels said, “We’ve seen a big rally, markets are still going higher, but this is now a time for caution.”

In the next part of this series, we’ll analyze Pimco’s asset recommendations in this scenario.


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