Global stocks just had the best start to the year since 2006

So far, so good.
So far, so good.
Image: Reuters/Philipe Wojazer
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Last year was marked by stock markets, particularly in the US, setting one record high after another. A stronger global economy, better-than-expected company earnings, and the gradual removal of monetary stimulus combined to send stocks ever higher.

The party hasn’t stopped in 2018. Japan’s stock index reached the highest since 1991 and the Dow surpassed 25,000. In fact, performance in the first five trading days of the year have been the best for global stocks since 2006.

The MSCI world index climbed 20% last year and added another 2.6% so far in 2018, edging out a 2.55% gain over the same period in 2010. Stocks have been helped by the fact investors have few alternative asset classes to invest in as bond yields have stayed low, while not everyone is ready to join the cryptocurrency hysteria.

Strategists at JPMorgan are expecting another strong year for equity markets, on the basis that global economic growth continues at a steady, above-trend clip and US tax reform reaps some benefits for companies (even if they suffer short-term pain). As the bank analysts said, despite the freezing cold weather in the US and an onslaught of new financial regulation in Europe, it’s been “a reasonably happy new year. “