There is a disconnect between what equity and bond market performance is telling us about the outlook for the global economy, and the performance of different asset classes that matter for investors. This disconnect bears the fingerprints of the US Federal Reserve and the European Central Bank’s dovish policy stance. The first quarter of 2019 delivered good returns for equity markets as measured using MSCI indices, with almost every major region in positive territory. Global equities were up by 12.3%, driven by both advanced and emerging-market equities, which rose 13% and 10%, respectively, following broad-based declines of similar magnitude in the last quarter of 2018. In advanced economies, the US, Europe and UK equity markets gained 13.3%, 9.7% and 9.4% in the first quarter of this year. In emerging markets, all the Brics countries’ equities delivered gains, China leading with 18% and SA lagging with 4% and the other three countries somewhere in between. Looking at these equity ...

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