Global Perspectives Monthly Book for December 2019

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  • Cover slide of the Voya Global Perspectives book
  • About Voya Global Perspectives
  • Voya Global Perspectives book Table of Contents
  • Index Definitions, page 1
  • Returns for a globally diversified strategy over the last 10 years refute the notion of a “lost decade”.
  • Corporate earnings growth is the barometer for the health of the global economy.
  • Since 1999, earnings for S&P 500 companies have grown more than 200% while the price level is now only 60% higher.
  • Reported fourth quarter earnings growth for S&P 500 companies is 6% year-over-year with 60% of companies reporting.
  • The U.S. manufacturing report has rebounded after a month of contraction; the latest eurozone and emerging markets reports also indicate expansion.
  • U.S. manufacturing and industrial production reached all time highs before pulling back amid the global slowdown.
  • At about 70% of GDP, the U.S. consumer is the game changer in economic growth. Consumption, income and retail sales have achieved all-time highs.
  • Stocks look historically attractive based on their earnings yield (E/P) compared to the yield-to-maturity of 10-year Treasuries.
  • Mid-cap stocks have had the best U.S. equity 10-year return record.
  • Projected market volatility spikes in times of crisis then drops as fears subside. Current levels are below average, but the Fed’s path to normalization of rates may lead to more typical volatility levels.
  • Don’t bail on bonds. A broad view of markets shows that some debt instruments, notably senior loans, have historically offered protection against the threat of rising U.S. interest rates.
  • The Fed funds target rate and Treasury yields remain historically low, even though the Fed increased the target rate in December 2016.
  • Credit spreads have declined since the 2008 crisis, yet still offer good opportunity; TED spreads are at the low end of the normal range despite debt and deficit concerns.
  • Economic growth fuels demand for imports, aggravating the trade deficit, which plummeted in the great recession as demand dwindled. Exports have faced headwinds even as the U.S. dollar has weakened.
  • The declining trend in U.S. global trade shows currently negative export and import growth, which reflects the global decline in world trade.
  • Euro zone growth has teetered close to zero for three years. Meager growth coupled with ultra low inflation has sparked repeated rounds of European Central Bank stimulus.
  • The unemployment rate has slowly improved in line with economic growth; recent reports and news of job growth and payrolls have continued the favorable trend.
  • Over the past 20 years the average asset allocation investor has significantly underperformed stock and bond markets and barely kept pace with inflation.
  • Over the past 20 years the average asset allocation investor has significantly underperformed stock and bond markets and barely kept pace with inflation.
  • Asset class returns vary widely over time, making allocation decisions difficult and market timing success unlikely. Equal-weighted global asset allocation returns (“Global AA”) are shown for illustration.
  • Index Definitions, page 1
  • Index Definitions, page 2
  • Index Definitions, page 3

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