Twelve for '19

Twelve charts illustrating the themes and market environment in 2019.


A dozen charts highlight a remarkable decade for the markets.

2019 was a fitting finale to an extraordinary decade that displayed the long-term resilience of economies and markets. Victory went to risk-takers, even though it rarely felt comfortable. Central banks provided the foundation and mechanism for asset-price appreciation. Corporations issued debt, purchased stock, and acquired competitors. Private equity made fortunes “rolling up” industries. Amazon became the flagship reminder for secular disruption, as technology pushed creative destruction. These are a few observed themes. Our humble conclusion: a mix of size (bigger having a significant advantage) and agility were hugely important to success over the past decade. In this note, we highlight some charts that help illustrate the story.

A Decade to Remember

Chart 1: Central bank balance sheets helped drive asset prices

Source: U.S. Federal Reserve, as of 11/28/19.

Chart 2: Asset Returns were both strong and broad based

Sources: S&P, Bloomberg Barclays, Credit Suisse. Cumulative total returns based on time period 12/31/2009 to 12/31/2019.

Chart 3: The first decade without a U.S. recession in modern history

Source: St. Louis Federal Reserve, as of 9/30/19.

Chart 4: Despite high global liquidity, overnight liquidity has weakened substantially

Source: Bank of America Merrill Lynch, as of 11/27/19.

Chart 5: Global bond yields declined across the developed world

Source: Bloomberg Barclays, as of 12/27/2019.

Global Benchmark yields

Source: Bloomberg Barclays, as of 12/30/2019.

Chart 6: While the number of publicly traded companies shrunk over the decade, the number of corporate issues increased

Sources: Worldbank, Bloomberg Barclays, as of 11/30/2019.

Chart 7: Disruption was most prevalent in Energy, Retail, and Tech

Source: Leveraged Commentary and Data, as of 12/27/19.

Chart 8: Tariff fallout has led to global supply-chain diversification

Source: Bloomberg, as of 12/23/2019.

Chart 9: Corporate leverage is a focus of the rating agencies

Sources: Moody’s, Morgan Stanley research, as of 11/30/19.

Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest) and may change over time.

Chart 10: Moody's 12-month ratings draft

Source: Moody’s, as of 11/30/19

Rating drift = (notches upgrades - notches downgrades)/rated issuers.

Chart 11: A decade of historically strong returns

Sources: Bloomberg Barclays, Credit Suisse, Leveraged Commentary and Data as of 12/30/19.

Chart 12: Technology represented the bulk of top-returning S&P 500 stocks

Source: Bloomberg, as of 12/21/19.

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Important Notes and Disclosures

This publication is provided by Pacific Funds. Pacific Funds refers to Pacific Funds Series Trust. This commentary reflects the views of the portfolio managers at Pacific Asset Management LLC as of January 8, 2020, are based on current market conditions, and are subject to change without notice. These views represent the opinions of the portfolio managers and are presented for informational purposes only. These views should not be construed as investment advice, an endorsement of any security, mutual fund, sector, or index, the offer or sale of any investment, or to predict performance of any investment. Any forward-looking statements are not guaranteed. All materials are compiled from sources believed to be reliable, but accuracy cannot be guaranteed.

Pacific Life Insurance Company is the administrator for Pacific Funds. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

Pacific Funds and Pacific Asset Management are registered service mark of Pacific Life Insurance Company (“Pacific Life”). S&P is a registered trademark of Standard & Poor’s Financial Services LLC. All third party trademarks referenced by Pacific Life, such as S&P, belong to their respective owners. References of third party trademarks do not indicate or signify any relationship, sponsorship or endorsement between Pacific Life and the owners of referenced trademarks.

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