Markets Update 31/12/2019 – Forex 2019 – a year in the rearview

Frankfurt – 31/12/2019

Forex 2019 – a year in the rearview

All in all, 2019 was an extremely strong stock market year. Many world markets, including the German Dax 30, rose steeply. 

In this article, we will not only look at yesterday’s trading day but also at the 2019 stock market year as a whole. 

On the last trading day of the year, investors cashed in because the stock market year has brought them lavish profits. The Dax gained a good 26 per cent over the year, which is the best year since 2012. It even outperformed its American brother, the Dow Jones.

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US Markets at a glance

Wall Street showed a negative trend at the beginning of the week.

The US leading index Dow Jones opened marginally higher, but then fell back to red territory. It closed 0.64 per cent weaker at 28,462.21 points. The NASDAQ Composite started trading with only minimal losses on the board. In the end, it dropped 0.67 per cent to 8,945.99 points.

Market participants were talking about profit-taking so close to the end of the record year. On the one hand, the tense situation between North Korea and the USA remained in the focus of investors, while on the other hand the USA and China seemed to be on the verge of signing their partial agreement.

On the economic side, positive news came in the form of the Chicago Purchasing Managers’ Index, which rose more than expected in December.

Overall the Dow had a record year with a total gain of over 22 per cent.

Far East Markets at a glance

The Far East stock exchanges showed different signs at the beginning of the week.

The Nikkei lost 0.76 per cent to 23,656.62 points by the end of trading. A strong yen, which was sought as a safe haven after the threats from North Korea, had a negative impact. On the Chinese mainland, the Shanghai Composite closed at 3,040.02 points with a gain of 1.16 per cent. In Hong Kong, the Hang Seng index rose by 0.33 per cent to 28,319.39 index points by the closing bell.

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Trading turnover remained thin just before the turn of the year. Support in China came from the central bank, which is continuing to push ahead with interest rate liberalisation. Chinese banks are to value outstanding loans with reference interest rates in future, which react more strongly to market movements.

Otherwise, the renewed war rhetoric of North Korean dictator Kim Jong Un weighed on share prices. He had set the USA a deadline until the end of the year and now called for the preparation of “offensive measures” to protect North Korea.

European Markets at a glance

Europe’s stock exchanges posted losses on Monday.

The EuroSTOXX 50 opened only marginally lower at first, but over time it widened the losses. In the end, a minus of 0.89 per cent to 3,748.47 index units was on the board.

According to insiders, business at the beginning of the week was dominated by fund managers who made final portfolio adjustments at the turn of the year.

Price moving news was thin on the ground at the beginning of the week, so investors were already looking ahead to the coming year and waiting for the flood of economic data from Europe and the USA, which is due on January 2.

The Dax 30, the leading German index, remained in the red after starting trading with a small loss. In the end, it was 0.66 per cent lower at 13,249.01 points. The TecDAX also moved into red territory, closing 0.67 per cent lighter at 3,014.94 points.

Forex, gold, oil and crypto

In forex trading, the euro continued to recover. At times the European common currency rose to over 1.12 dollars on Monday. At 1.1211 dollars, it reached its highest level since August. Currency experts pointed to the current dollar weakness as a reason. Since the Christmas holidays, the euro has appreciated by a good one per cent against the Dollar.

The commodity markets were quiet. The oil price remained at its highest level since September. North Sea oil of the Brent variety rose by 0.2 per cent to 68.29 dollars.

The price of gold held its ground at over 1,500 dollars per troy ounce. Over the year as a whole, the precious yellow metal gained a good USD 200 per troy ounce or almost 18 per cent. It is thus heading for the best annual result since 2010.

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The cryptocurrency market remained calm as well. One Bitcoin is currently traded at approximately $7,500, while one Ethereum costs $130. One XRP is worth $0.1920.

Despite the price declines since the summer, the bottom line for Bitcoin investors is that 2019 has been a conciliatory year. The cryptocurrency costs 7,551 dollars on Monday, at times 3.9 per cent more than the day before and almost twice as much as at the end of 2018.

All in all, the total market capitalisation of all cryptocurrencies rose in the year that is coming to an end to just under 200 billion dollars from just under 130 billion dollars a year ago.

Corporate and world news

Tesla delivers first vehicles to China

Less than a year after construction began, the US group has delivered the first cars from its new plant in Shanghai. At a ceremony on Monday, 15 locally produced Model 3 e-cars were handed over to Tesla employees.

After the start of construction in January, the new “Gigafactory” had been raised in record time. Production in China enables Tesla to bring its cars to the world’s largest car market at a significantly lower price without high import duties. The plant in Shanghai will eventually have a capacity of 500,000 vehicles a year, even if production is expected to be significantly lower initially. The shares of the e-car manufacturer reached a record high in New York on Friday. 

AS Rome share price gets a boost

US billionaire Daniel Friedkin has his eye on the listed Italian football club AS Rome. As the loss-making traditional club announced on Monday, there are talks with a consortium led by Friedkin about selling the first division club. However, no decision has been made yet. First, the group around the billionaire will examine the books.

The “Financial Times” had previously reported that the consortium would pay the record sum of 750 million euros for the Lazio-Rome rival. Currently, the current fourth in the table is controlled by a group of US investors. Last season (ending June) AS Rome posted a net loss of 24.3 million euros.

The opportunity to find a financially strong new owner gave investors access to the company: US billionaire Daniel Friedkin has his eye on the listed Italian football club AS Rome. As the loss-making traditional club announced on Monday, there are talks with a consortium led by Friedkin about selling the first division club. However, no decision has been made yet. First, the group around the billionaire will examine the books. 

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The “Financial Times” had previously reported that the consortium would pay the record sum of 750 million euros for the Lazio-Rome rival. Currently, the current fourth in the table is controlled by a group of US investors. Last season (ending June) AS Rome posted a net loss of 24.3 million euros.

The opportunity to find a financially strong new owner gave investors faith to buy-in on the share: At times, the share price shot up 9.6 per cent, but then gave back a large part of the profits.

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