So where to now for Wall Street and other global markets in 2020?
After a 0.3% on new Year’s Eve, the S&P 500 index ended 2019 up 28.9%, its best performance in six years; the Dow rose 22% and Nasdaq jumped more than 35% (thanks especially to late gains in Apple and Amazon in December).
The strong gains in 2019 reversed the losses or small rises seen over 2018 which had ended on a very negative note, leading to many gloomy forecasts for 2019.
They were to prove well off the mark as markets surged globally, especially in the first six months, despite Trump’s trade war with China, the uncertainty of Brexit and all those gloomy claims that an inverting bond market yield curve could mean a future recession.
But bond yields rose as the Federal Reserve cut rates three times so the broad indexes of the American bond markets were up nearly 9% – Australian 10 year bonds fell by 0.95% to 1.37% on the last day of the year (even after rising 0.34% in December).
The US 10 year bond ended 2019 at 1.92%, down 0.77%.
But bond yields in Germany, the Netherlands and Japan were still negative – however, the value of bonds in a negative yield position fell in December.
Commodities gained as well as the US dollar weakened off the back of the Federal Reserve’s rate cuts and expectations of not rate moves in 2020.
On New Year’s Eve, the Dow closed 2019 up 76.30 points or 0.3%, at 28,538.44, while the S&P 500 index added 9.49 points, or 0.3%, to end the year on 3,230.78. The Nasdaq rose 26.61 points, or 0.3%, to 8,972.60.
The Dow’s 22.3% rise was its best year since 2017, the S&P 500 saw its best year since 2013, gaining nearly 29%. The Nasdaq also had its strongest annual performance in six years after rallying 35.2%.
The Dow ended the year off 0.4% from its December 27 record, the S&P 500 was off 0.3% from its late-December all-time high. The Nasdaq was 0.6% under its record, on December 26.
The Dow rose 6% during the quarter and 1.7% for the month, while the S&P 500 rose 8.5% over the three-months and 2.9% in December. The Nasdaq saw a return of 12.2% in the last three months of the year and 3.5% in December.
Those gains were very different from Australia where the ASX 200 slipped 2.36% in December and fell 4.2 points for the quarter.
For the decade, the Dow advanced 173.67%, the S&P 500 189.72%, and the Nasdaq 295.42%.
Global equities had their best year since 2009, with MSCI’s all-country world index of stock performance in 49 nations up 24% for the year and 88% for the decade.
European shares rose 32% for the Stoxx 600 index for the best year in a decade. The London market edged up 12% amid all the Brexit uncertainty, the German market saw a 25% and the French bourse rose more than 26%.
But the Italian market jumped 28%, matching the gain for the S&P 500, despite a very weak economy and repeated bank rescues towards the end of the year.
In Asia, the Hong Kong market rose 9% despite the months of protests that continued at year’s end and look like running in 2020.
Japan’s market saw an 18% gain for the Nikkei while the Shanghai market rose a solid 22.3%.
