GROUPAMA / 2019 Universal Registration Document

6 EARNINGS AND FINANCIAL POSITION Management report of the Board of Directors

Financial markets in 2019 6.1.1.2 The prospect of lasting accommodative monetary policies reinforces the decline in long rates. The search for yield is supporting risk appetite, and all asset classes are experiencing sharp inflationof their valuation.

to its balance-sheet reduction as well as corporate earnings generally better thanexpected. Indices were then supported by increasingly accommodative statements from central banks. However, this increase is taking place against the backdrop of a downward revision of corporate profit forecasts for the next 12 months. Valuation multiples are therefore rising above their long-term average. After the summer, the favourable outcome of the China-US trade disputeand the confidencegiven to Boris Johnsonby British voters to carryout Brexit boostedrisk appetite.

Changes in equity markets (a)

The first half of the year was marked by an equity market rebound after the sharp decline in late 2018. The reboundwas triggeredby an announcementby the US Federal Reserve of a premature end

PERFORMANCE OF EQUITY INDICES

30

25

20

15

10

5

0

-5

Jan. 2019

Feb. 2019

Mar. 2019

Apr. 2019

May 2019

Jun. 2019

Jul. 2019

Aug. 2019

Sept. 2019

Oct. 2019

Nov. 2019

Dec. 2019

S&P 500

Eurostoxx 50

Nikkei 225

MSCI Emerging Markets

Last point :30December 2019 - Performance without dividend inlocal currencies

Changes on interest rate markets (b) In the eurozone, rates reached historic lows at the end of the summer following the ECB’s announcements to resume asset purchasesand cut policy rates. The search for yield contributedto the flattening of curves on the long parts exceeding 10 years. The 10-year OAT yield was close to 0% at the end of the year after a low of -0.43% at the end of August. The Italian spread narrowed significantlydue to the end of the Five Star Movementand Northern League coalition,eased tensionswith the EuropeanUnion, and the search for bond yields in an environment of very low interest rates.

US yields also fell very significantly over the year with a parallel movement of the entire sovereign curve of approximately90 basis points following the Fed’s statements. The 10-year Treasury note reachedequilibrium atlevels slightly below2% in December. However, the end of the year saw a slight rebound in all yields, thanks in particularto prospectsof a trade agreementbetweenthe United States and China and more positive macroeconomicnews in the eurozone.

109

Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES