Analysis

Last year was a stellar year for emerging equity markets.

We remain constructive on the outlook for the US equity market over the next year and continue to see upside potential for the S&P 500 Index to between 1250 and 1350 by the end of 2010.

While job losses have been milder than those seen in previous recessions, it might be tempting to think, despite an extraordinary recession, we are set to enjoy an ordinary recovery.

Corporate bonds posted a strong performance in 2009 (c. 15%), more than recovering the losses of 2008, and have dramatically outperformed equities over the last decade.

The European market has continued to rise, led by basic industries.

I think 2010 could surprise the sceptics, many of whom were wrong-footed by the 2009 rally.

This year began broadly as expected, with most believing that the losses of 2008 would take years to recover from.

The first few trading sessions of 2009 were surprisingly bullish continuing the momentum of a late December rally.

On the whole, 2009 is likely to be remembered as an extremely good year for risky assets, with equities as well as corporate bond markets posting stellar performance, albeit not without considerable volatility.

Unlike the London housing market that seems to rise every year, the stock market had another year of wild gyrations.