Global markets had a solid performance in Q4 following an upward revision in global, synchronized economic growth. Expectation for stronger growth was due to stronger corporate earnings in the US, a tax cut and reform, benign inflation signs, extremely low volatility in global risk assets, Fed gradual and slow albeit constant rate hike, European activity and inflation read better than expected, Japanese corporate earnings stronger after weaker yen and continued stimulus, China’s service market reforms and deleveraging efforts avoiding slowdown in activity, supporting therefore most of the industrial commodity space, healthier structural reforms in most Emerging Market countries supported in part by a weaker USD, and ongoing extreme policy accommodation by major global central banks.
