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Analytics, 10 January 2020

2019 Recap in financial markets

When you think about 2019 in terms of financial markets, you think it must have been bad, right? The year was hit by issues ranging from geopolitics, a trade war between the world’s two largest economies and an ever-rising global debt to name a few. Investors might have a different opinion as they check on their closing year portfolios.

A wild ride started on January 2nd, when the Yen did a massive 3% leap against the dollar, for absolutely no straightforward reason. Other currencies briefly convulsed. Most central banks and regulators couldn’t account for the swings and resort to blaming “witching hour”. Ukraine’s new president and a new reformed agenda saw the Hryvnia UAH shoot up 19% this year, while Russia’s rouble and Egypt’s pound went up about 11%. On the other end of the spectrum, Argentina’s peso and Turkey’s lira took massive hits, with the Peso taking a 28% hit, and the Lira a 13% hit.

U.S. Treasuries, the world’s benchmark government IOU, have made a whopping 9.4 percent after yields plunged as much as 120 basis points. That followed a near 40 basis point fall the last quarter of 2018, after five quarters in which they had consistently risen.

In the commodities markets, Oil recorded its best first quarter since 2009, achieving almost a 25% rise in 2019. The oil stocks burst, and key dividend rule changes made Russia’s stock market the best in the world with a 40% rise.

In metals, gold had its best year since 2010 with a 15% hop. However, palladium, used in the automotive industry, leaped up 55%. But it wasn’t all merry for metals. While copper buckled terribly in the middle of the year, it finished 4% higher than it started the year. Aluminum is 2% down.

Tech continued to boom. Apple lost to Saudi Aramco as the world’s most valuable firm but still had a massive 77% leap. As for the Fang Stock, Facebook surged 57%, Amazon 19%, Netflix 24% and google 30%. Microsoft had a good year, hopping up 53%. China’s tech sector was not left behind having a 64% rally while Alibaba shot up 53%.

It was wild in the cryptocurrency world, following a terrible 2018, which saw bitcoin record drop more than 70%. Bitcoin recorded highs of 260% in June from the new year but has since plummeted to just 85%.

The world’s Stock markets also hit 19 new highs in 2019 with roughly 5% of all trading days for the U.S. stock market seeing a new all-time high since 1928. Globally, stocks piled more than $10 trillion in 2019.

Despite all the goodies that 2019 came with, 2020 seems to be a pretty wild ride. Wall Street has issued warnings about a set of threats to the financial market in 2020. Trade wars, wealth inequality, the US president’s possible impeachment among others pose a threat to markets according to a list published by Deutsche Bank’s chief economics to their clients.

What are your expectations for 2020?

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