6 Months : From Oct 2019 to Apr 2020
By Anna Hirtenstein
Global stocks were mixed and the dollar extended its fall Tuesday as investors wrapped up trading after one of the best annual market performances in years.
The Stoxx Europe 600 was little changed, slipping 0.1%, and the U.K.'s FTSE 100 closed early for the holiday with a 0.6% drop. Auto maker Renault fell 0.4% after its former chief executive Carlos Ghosn fled to Lebanon to avoid trial in Japan. Futures tied to the Dow Jones Industrial Average index were little changed.
"Despite a tricky macro backdrop, it's been a very, very good year for global markets," said Emma Wall, head of investment analysis at Hargreaves Lansdown. "What we're seeing today is likely a slight drawback in that euphoria as what's supporting that rally isn't necessarily rock solid," she said, referring to the mixed economic outlook for 2020.
Global markets were roiled by political events in 2019, including the U.S. trade war with China and the U.K.'s politically snarled process to leave the European Union. Despite this, U.S. stock markets are set to have the best year since 2013, with the S&P 500 surging 28% and the tech-heavy Nasdaq advancing 35% as of Monday. The Stoxx Europe 600 climbed 23%, set for its best year since 2009 and hovering near its all-time high.
Part of what made 2019 remarkable for investors was that gains were strong across stocks, bonds and key commodities, such as oil and gold. Vanguard's Total Bond Market ETF, for instance, which owns a broad collection of government and corporate bonds, returned 8.9% for investors.
Gold climbed 0.3% to $1523.80 per ounce, bringing its yearly gains to 19%, its best year since 2010.
Crude oil moved lower, with Brent slipping 0.8% and WTI, the U.S. benchmark, down 0.7%. Still, oil looked poised to finish the year up by more than a third, with WTI selling at $61.21 per barrel.
"There's very limited liquidity today, that's probably just some [algorithmic] activity and portfolio players closing their books," said Frank Monkam, a crude oil trader at Gunvor Group.
In currency markets, the ICE U.S. dollar index, a measure of the dollar against a basket of currencies, fell for the sixth straight day, according to FactSet. The dollar weakened against the Chinese currency 0.4%, with one dollar buying 6.959 yuan. For the year, the dollar index finished almost exactly where it started, rising just 0.5%.
What we are seeing is "broad based dollar weakness as we head into next year," said Lee Hardman, a currency economist at MUFG. "Markets are becoming more sensitive to the Fed's action to boost dollar liquidity and the rapid expansion of their balance sheet. That's having this negative impact on the dollar right now."
The U.S. Federal Reserve's balance sheet hit $4.17 trillion last week from $3.8 trillion in September, after it flooded money markets with hundreds of billions of dollars in cash to reduce volatility in repo markets.
In Asia, the Shanghai Composite Index closed up 0.3% after China released its official manufacturing purchasing index figures, which showed an expansion of activity for the second straight month.
The Shanghai Composite finished the year up 22.3%. Among the global market laggards was Hong Kong, whose economy stuttered after months of clashes between antigovernment demonstrations and police. The benchmark Hang Seng Index fell 0.5% Tuesday and finished the year up just 9%.
Later Tuesday, investors will be watching for the release of the U.S. Conference Board's consumer-confidence gauge for December. This is expected to provide insight into holiday season shopping, an important driver of retail sales.
Write to Anna Hirtenstein at firstname.lastname@example.org
(END) Dow Jones Newswires
December 31, 2019 09:05 ET (14:05 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.