Some US indices fell, yet still outperformed global markets in the first month of the New Year, S&P 500 and Dow Jones fell 0.16% and 0.99%, while NASDAQ rose 1.99%.
With the 1st stage Sino-US trade deal finalised and signed in mid-January, market sentiment improved, US equities set new record highs in the month. US corporate earnings came in positive, with a majority reporting market beats. As the epidemic has limited impact to the US economy, there was no significant market correction. The January FOMC meeting resulted in no changes to the rate, but it is worth noting that the Fed promised that the current balance sheet expansion period will extend well into April, which provides additional support to markets.
Fundamentals stayed strong as expected, Q4 GDP met expectations, and the most important indicators of consumer confidence and various PMIs all exceeded market estimates, the US market remains a relatively attractive investment option with limited China exposure. Given the relative stable environment in the US, mainly due to a temporary ceasefire in the trade war, although global volatility increased over the month, we remain positive on the US equity markets in 2020.