Global update: Double-digit gains in 2019

Despite a year that was filled with political and social upheaval – from the trade war between the US and China, through Brexit, to the civil unrest in Hong Kong – many world markets achieved double-digit gains over 2019 as a whole. 

  • The US and China agreed a preliminary trade deal
  • Germany’s slowdown continued to cause concern
  • Q3 growth in Japan proved better than first estimated

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Despite a year that was filled with political and social upheaval – from the trade war between the US and China, through Brexit, to the civil unrest in Hong Kong – many world markets achieved double-digit gains over 2019 as a whole. 

“The Conservative Party won the UK General Election”

The Conservative Party won the UK General Election in December, and Prime Minister Boris Johnson’s 80-seat majority in the House of Commons cleared the way for his Brexit deal. MPs voted by 358 to 234 in favour of the EU (Withdrawal Agreement) Bill, which will proceed to Committee Stage in January. The bill was amended to rule out any extension of the transition period, triggering renewed concerns over the possibility of a no-deal Brexit. The FTSE 100 Index edged only 0.1% higher during December, but rose by 12.1% over 2019. 

Investors were cheered by the news that the US and China had reached a preliminary trade deal. The “Phase One” agreement reduces or postpones billions of dollars-worth of tariffs and includes a pledge from China to buy large quantities of US agricultural, energy and manufactured goods. Nevertheless, the deal represents only a first step in the process, and there is still much to resolve between both parties. Elsewhere, President Donald Trump was impeached during December for abuse of power and obstruction of Congress. The Dow Jones Industrial Average Index rose by 1.7% over December and by 22.3% during the year.

Germany’s economy is continuing to put a brake on the eurozone as a whole, according to IHS Markit, which found that the country’s manufacturing sector had contracted for an eleventh consecutive month during November. Growth in the services sector ticked up slightly, but was not enough to offset manufacturing’s ongoing slide. Meanwhile, Germany’s central bank warned that the country is likely to continue to suffer lacklustre growth in 2020. The Dax Index crept up by 0.1% in December, but posted annual gains of 25.5% over 2019 as a whole. 

Japan’s economy grew more rapidly during the third quarter than initially calculated, expanding at an annualised rate of 1.8% during the period, compared with an earlier estimate of only 0.2%. However, this better-than-expected growth does not reflect October’s increase in consumption tax. The Nikkei 225 Index rose by 1.6% during December, but posted an annual increase of 18.2% over 2019. 


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