Equities market monthly

After a torrid end to 2018, equity markets stabilise

Key points


  • 2019 has started on the right foot after December’s sell off amid thinly traded markets
  • Positive surprises from the fourth quarter earnings season would help break the ongoing negative feedback loop between equity prices, confidence and investment
  • Negative investor sentiment seems to be bottoming out and valuation multiples are now back to near 2015-2016 lows

Risk rebound in January following December slump

2018 was a challenging year with global equity markets falling 7.2%. Latin America was only major regional equity market in the green (+4.2%) while Japan (-14.9%), the euro area (-12.1%) and emerging markets (-9.7%) faced heavy drawdowns.

On the sector front, defensive plays outperformed with utilities (+4.4%) and healthcare (+3.4%) leading the pack while cyclical sectors, such as industrials (-12.7%), financials (-12.5%) and materials (-12.1%) lagged the benchmark. In terms of styles, growth outperformed value by close to 3.6% globally (Exhibit 2).

December witnessed the largest sell off in a calendar month for the S&P 500 since the 2008 global financial crisis amid thinly traded markets. Volatility levels were disrupted in the fourth quarter of 2018 with the CBOE Volatility Index (VIX) trading at a daily average of 21 and peaking at 36 in December. Although it is only two weeks old, 2019 has started on the right foot with global equities up 2.8% year-to-date.




This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.

Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

This document has been edited by AXA INVESTMENT MANAGERS SA, a company incorporated under the laws of France, having its registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the Nanterre Trade and Companies Register under number 393 051 826. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

In the UK, this document is intended exclusively for professional investors, as defined in Annex II to the Markets in Financial Instruments Directive 2014/65/EU (“MiFID”). Circulation must be restricted accordingly.

© AXA Investment Managers 2019 All rights reserved