So, a sparkling year -- including the biggest jump in global stocks since 2009.
But some of this rally is a recovery from the slump in autumn 2018. Plus, 2020 could derail the rally if we see renewed trade tensions, a global slowdown, or new Brexit worries.
That’s probably all for me for this year (although I might pop back with the Wall Street close, if I can be dragged away from New Year festivities).
Very best wishes for 2020 from us all here. See you next year! GW
Spending on the Bank of England’s summer party crept closer to £100,000 this year despite Threadneedle Street promising MPs it would put the expensive event under review.
Figures released by the central bank showed that party planners racked up a bill of £96,188 on the event, which hosted nearly 2,500 staff and their families at the Bank’s sports club in Roehampton, south-west London in July.
Costs for the annual party – known as Governors’ Day – included more than £52,200 on food and soft drinks and nearly £30,000 on family entertainment, which in 2018 involved a treasure hunt, bake-off competition, fun run and bouncy castle. That was on top of nearly £2,000 for equipment and £12,000 for “other” undisclosed expenses.
The total is slightly higher than the £95,673 spent on Governors’ Day in 2018, and while the increase is marginal – about £515 – it will raise questions over whether the bank is serious about reviewing its costs...
Spending on the Bank of England’s summer party crept closer to £100,000, despite promising MPs it would put the costly event under review https://t.co/qm6a3urrxA
The Dow Jones industrial average has dipped by 61 points, or 0.2%, in early trading.
Donald Trump’s pledge to sign the Phase One trade deal on 15 January hasn’t enthused traders - little wonder, as they’ve been waiting for this to happen for months.
This still leaves the Dow up an impressive 22% this year.
Newsflash: The preliminary trade deal between America and China will be signed in two week’s time.
President Trump has just tweeted the details --claiming that the agreement is “very large and comprehensive”.
I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15. The ceremony will take place at the White House. High level representatives of China will be present. At a later date I will be going to Beijing where talks will begin on Phase Two!
This Phase One deal was finally nailed down over two weeks ago. It is thought to include China pledging to buy more US agricultural goods, and also stronger protection for intellectual property right.
But many of the thornier issues, such as Beijing’s massive subsidies for its own companies, are not resolved.
Donald Trump’s trade advisor, Peter Navarro, has predicted that markets will keep rallying in 2020.
Speaking on CNBC, Navarro predicted the Dow would jump to 32,000, from 28,462 last night. That would be a gain of 12%, on top of the 22% gains seen in 2019.
People take family photos in front of Christmas decoration in Athens, Greece. Photograph: Orestis Panagiotou/EPA
Newsflash: Greece’s stock market has ended 2019 up a remarkable 50%.
During the eurozone crisis, the idea of Greece’s’ stock exchange outpacing the rest of Europe would have sounded quite bizarre. But as 2019 drew to a close, the Athens bourse was – by some distance – the best-performing European exchange.
The Athens General Index (ATG) of Greece’s 60 biggest firms has just closed at 916 points, close to last week’s five-year high. It started the year at 613 points.
Two factors drove the rally. Greece’s bailout ended in August 2018, after a grim eight-year grind of spending cuts and tax rises that drove the country into a deep recession. Greece has now rolled back the capital controls enforced in 2015 to prevent a run on its banks, but still has to hit challenging budget surplus targets.
Second, the left-wing Syriza government of Alexis Tsipras was replaced in July 2019 by a more market-friendly right-wing administration. PM Kyriakos Mitsotakis is now cutting taxes, and pledging to abolish regulations and slash red tape.
Mr Mitsotakis declared in September.
“One stone at a time, we’re setting the foundations of the country’s regeneration.”
Banks had a particularly strong year, with Attica and Piraeus both gaining over 250% in 2019. Utility companies and infrastructure providers also rallied, as Athens looks for more investment from overseas.
But long-term investors have still suffered badly. Back in 2007, when the credit crunch struck, the ATG was trading at over 5,200 points. It was still at 2,000 – more than double today’s levels – when the first bailout request landed in 2010.
Newsflash: Britain’s stock market has just posted its best annual performance in three years, despite stumbling over the line today.
The FTSE 100 index of top UK-listed shares has closed at 7,542 points. That’s a 12.1% gain for the year, as it ended 2018 at just 6728.
But the rally ended with a whimper. The FTSE 100 ended the last, shortened, trading day down 44 points or 0.6%. That’s its second daily fall in a row, following 11 days of rising prices in the aftermath of Boris Johnson’s election win.
Athletics fashion chain JD Sports was the top riser in London, gaining 140% in the last 12 months as it continues to defy the high street crisis.
Housebuilders also had a good year, with Barratt and Taylor Wimpey both gaining 50%.
David Madden of CMC Markets says the construction industry should benefit from the resolution of the Brexit crisis, although there are still uncertainties ahead:
The solid win by the Conservative party in the recent general election helped drive up the share price of the house builders, but there has been a new development on the Brexit front. Judging by the plans Prime Minister Johnson has, a no-deal Brexit after the transition period at the end of 2020 might be an option, so uncertainty could continue to hang over the housing industry in 2020.
There has been a belief in certain sections of the City that investment has been delayed because of Brexit, so we could see more of that. On the plus slide for the housing market, the Bank of England are unlikely to hike rates until Brexit has been wrapped up.
Mihir Kapadia, the CEO of Sun Global Investments, says markets have flourished in 2019 -- and they could keep shining in 2020.
He writes:
As the decade comes to an end, it is clear the global stock market rally that began in March 2009 continues to be in place. The Nasdaq and the S&P rose 34.8% and 28.5% respectively. This is a contrast to the depressed levels in December 2018 following the end of year decline in 2018. If we compare with September 2018, the S&P 500 is up a more modest but still respectable 9.8%.
Markets have also been very calm and stock market volatility as measured by the S&P VIX has been remarkably low for most of 2019.
China’s stock market had a torrid 2018, slumping by 24%, which was the worst performance by a major index.
But 2019 has been much brighter. The Shanghai and Shenzen markets have clawed back all those losses, rallying by a third this year.
Last year’s plunge forced policymakers to act -- by easing monetary policy and raising government spending. The deepening trade dispute with America also forced policymakers to halt efforts to deleverage the economy, and focus on propping up growth.
Zhou Longgang, an analyst with Huachuang Securities, says:
“The sharp correction in 2018 pushed valuations of China stocks to record lows, prompting a recovery in 2019, as Beijing rolled out supportive measures to boost the economy.”
2019 was a bad year for stock market bears, as Beijing pandered to demands for more stimulus Photograph: STR/AFP via Getty Images
Did Carlos Ghosn hide in instrument case to avoid facing the music?
Members of the press wait in front of a house identified by court documents as belonging to former Nissan chief Carlos Ghosn in a wealthy neighbourhood of the Lebanese capital Beirut today Photograph: Anwar Amro/AFP via Getty Images
The most astonishing business story of the day, and for several months, is Carlos Ghosn’s remarkable escape from Japanese authorities.
Last night, the former boss of Renault-Nissan popped up in Beirut - a major surprise, as he was under strict controls in Tokyo facing financial misconduct charges.
Ghosn, who has denied defrauding the car giant, says he has “escaped injustice”.
In a stern statement, he accusing the Japanese system of assuming guilt and being rigged against him, with a trial expected to start next year.
He insists:
“I have not fled justice – I have escaped injustice and political persecution.”
But how did Ghosn leave Japan, given he had surrendered all his passports? He was also being tracked by police, having been charged with understating his salary and transferring $5m of Nissan funds to an account in which he had an interest.
One theory, worthy of a Hollywood film, is that he made his getaway in a musical instrument case!
I can read a million words on how car boss Carlos Ghosn escaped 24 hour surveillance in Japan to flee by private jet to Lebanon. Beirut sources saying he hid in a box designed for a musical instrument. Double bass, presumably.
The theory is that a group of ‘musicians’ turned up at the Ghosn residence in Tokyo for a performance, and left with the former auto magnate crammed into one of their boxes.....
An investor monitors stock prices at a brokerage in Beijing today Photograph: Ng Han Guan/AP
China’s stock market has closed for 2019, after a very strong year.
The CSI 300 index, which contains the biggest companies on the Shanghai and Shenzen markets, has rallied by 36% since January.
That’s quite surprising, given the damage caused to China’s economy by the US trade war.
But policymakers have responded to slowing growth by pledging new stimulus measures, cutting borrowing costs and trying to boost infrastructure spending. This has lifted markets, meaning China’s shares have grown faster than Wall Street this year (and a lot faster than the UK market).
But, investors are now wondering when Phase Two will ever be reached, as Stephen Innes of AxiTrader explains:
While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020’s uncertainty. This despite “Trump’s trade deal in the bag,” according to the President’s hawkish trade adviser Peter Navarro.
Sure, the worst-case of a tariff escalation scenario has been seemingly averted. But, once the P1 deal is signed, investors will then press to consider the P2 risks, after all how much more progress can be realistically expected ahead of the US elections next year.
Apple, for example, has gained 84%, while Microsoft is up 55%. As these companies have grown steadily bigger, they’ve pushed the wider indices higher too.
GK: "We live in a world where the big just keep getting bigger & capture monopolistic rents. Concentration of performance is linked to index outperforming, not b/c it is best portfolio, but simply because it is index, and so bought directly by an ever growing number of investors" pic.twitter.com/Da8I8JByga
The rise in world stock prices this year has been quite remarkable, as this chart shows:
Global stock markets have gained another $700bn this week in thin trading on santa rally. All equities now worth $87.1tn, just $200bn shy of a fresh life-time high and equal to 100% of global GDP so stocks have entered bubble territory. pic.twitter.com/JgXmKPDWCN
Introduction: Global stocks enjoy best year since 2009
A trader works at the New York Stock Exchange, where stocks have surged this year Photograph: Bryan R Smith/Reuters
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s the final trading day of 2019, and what a year it has been! Investors around the world are toasting the best 12 months since the financial crisis, following strong gains in equities around the globe.
The MSCI World Index - a broad gauge of stocks in developed markets across the globe - has surged by around 24% in the last 12 months.
Starting January at 456 points, it is ending December at 564 points, having hit a record high last week.
The MSCI World Index Photograph: Refinitiv
That beats the 21% gain recorded in 2017, and is the chunkiest move since the recovery from the last financial crisis back in 2009.
The MSCI World Index over the last decade Photograph: Refinitiv
The rally has been broad-based -- eurozone stocks are up around 20% this year, Japan has gained 18%, while America’s tech-focused Nasdaq is up a sizzling 35% thanks to major players including Apple and Amazon.
We’ve seen record highs on Wall Street, while European stocks touched their highest levels since 2015.
Shares have been lifted by central bankers, who stepped in (again) with easy money to support the markets. US interest rate cuts, and fresh monetary stimulus in the eurozone, lifted asset prices.
Optimism that America’s economy will avoid a recession, and that the US-China trade war will be resolved, also pushed markets higher.
Britain’s FTSE 100, though, has lagged slightly behind this year. It has gained around 12%, with political uncertainty and Brexit worries making UK stocks rather unloved. But it has benefitted from a ‘Boris Bounce’ since this month’s election, which lifted the market for 11 days in a row.
The smaller FTSE 250 index, which contains more domestic stocks, had a good year too. It has gained 25% this year, hitting fresh record highs this month.
Depending how Brexit plays out, some analysts predict London’s market will rally in 2020.
As John Moore, senior investment manager at Brewin Dolphin, puts it:
The ingredients are there for the FTSE 100 to hit a new high. In comparative terms, UK companies look undervalued and the reasons for not owning UK assets are starting to dissipate.
That could precipitate a return to UK equities for investors who previously sold them off. While there has been some volatility and a couple of new index highs, the FTSE 100 is more or less where it was two years ago
London trading ends at lunchtime today, so we’ll have a final reckoning of how the year has played out.
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