2010 Market Preview

January 15, 2010 | Greg Leonberger, FSA, EA, MAAA, FCA, Partner, Director of Research

Though the scars of the 2008 financial crisis remain, 2009 helped to alleviate some of the pain as financial markets rallied and tidbits of positive economic news emerged. Most major stock indices posted positive returns in 2009, and the bond market held steady (with the exception of U.S. Treasuries coming back to earth), with sectors such as high yield and senior secured loans recording record returns. Alternative asset classes had more of a mixed 2009: hedge funds reversed their 2008 struggles, while debt access and legacy assets continued to haunt the real estate and private equity markets. On the economic front, GDP turned positive in the third quarter, perhaps signaling that the recession was over and brighter days lie ahead. Despite these facts, many questions still remain. Has the stock market rally outpaced the economic recovery? What should we expect from alternative asset classes? Is inflation a threat to the economy? When will banks resume normal lending practices? Will the unemployment rate improve?

In the following articles, we will take a closer look at each asset class, examining the major news items from 2009, as well as critical issues for 2010. Each article contains insightful analysis and key themes to monitor over the coming year, themes which will underlie the actual performance of the asset classes covered. Articles are offered for the following asset classes: fixed income, domestic equities, international equities, hedge funds, real estate, infrastructure, and private equity. As a launching point, we take a broad view of the economy and examine some crucial macroeconomic topics as they pertain to the U.S. economy.

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