• Europe begins to exit recession by the end of year as the ECB eases and financial stresses lessen.
• The U.S. yield curve steepens as financial risks recede and deflationary threats lessen.
• U.S. stocks record a new all-time high as stocks advance for the fifth year in a row.
• Emerging market equities outperform developed market equities.
• After two years of underperformance, U.S. multinationals outperform domestically focused companies.
• Large-cap stocks outperform small-cap stocks and cyclical companies outperform defensive companies.
• Dividends increase at a double-digit rate as payout ratios rise.
• A nascent U.S. manufacturing renaissance continues, powered by cheap natural gas.
• The U.S. government passes a $2–3 trillion 10-year budget deal.