Wall Street ended the last session of a robust year on a positive note, galvanized by accommodating central banks and the hope of a easing of trade tensions.
Its flagship index, the Dow Jones, went up 0.27% on Tuesday to finish at 28,538.44 points according to the final results at the close. The highly technological Nasdaq appreciated 0.30% to 8,972.60 points and the S&P 500, which represents the 500 largest companies listed on Wall Street, gained 0.29% to 3,230.78 points .
But for the year as a whole, the Dow Jones jumped 22% while the Nasdaq and the S&P 500 recorded their best year since 2013, taking off by 35% and 29% respectively.
2018 had been a difficult year, with market players fearful of the rapid rise in interest rates decided by the American central bank and the slowdown in the world economy amid trade tensions and Brexit.
But the Federal Reserve changed its tune since January 4, 2019 by saying it wanted to be “patient” on its monetary policy and subsequently lowered its rates three times.
The upheavals of the trade war between Washington and Beijing have shaken many sessions well but the constantly relaunched hope of a compromise has supported the rise in the indices.
President Donald Trump confirmed in a tweet just before the market opened on Tuesday that the partial agreement reached by negotiators from the two countries in mid-December would be signed in the White House on January 15.
Trump also said he will go “to a later date” in Beijing, where talks for “phase 2” of the deal will begin.
Corporate profits fell in 2019 less sharply than expected by analysts who were particularly worried about the apparent lack of confidence of the bosses and the weakness of their investments.
New challenges for 2020
As for the job market, it has remained robust with an unemployment rate at the lowest in 50 years. What encourage the confidence of American consumers, engines of growth in the United States.
The fear of a recession in 2020 finally more or less dissipated in the fourth quarter, allowing the Wall Street indices to be particularly dynamic as the end of the year approaches.
“Many parameters returned in 2019 and this has a lot to do with the generosity of central banks in the United States but also in Europe and in emerging countries,” notes Quincy Krosby, strategist for Prudential.
“The challenges for 2020 will be different,” she says. The evolution of the markets will depend, in particular, according to her, on the winner of the US presidential election in November, the intensity of the recovery in growth in China and the extent of the rebound in corporate profits.
Resounding successes and failures
On the value front, 2019 was marked by entries into stock Exchange resounding, with unexpected successes such as that of the vegan start-up Beyond Meat and high-profile failures such as those of applications for connecting drivers with passengers, Uber and Lyft.
The WeWork debacle also marked the spirits: the growing distrust of the market vis-a-vis its whimsical ex-boss Adam Neumann and vis-a-vis its economic model incited the company to give up its arrival on Wall Street and pushed many investors to question the indulgence granted to start-ups accumulating heavy losses.
Tech giants have continued to dominate the stock market, with Apple taking 86% and Microsoft 55%, for example.
(Afp / nxp)
Created: 12.31.2019, 10.59 p.m.