World stocks on Tuesday closed out a notably profitable year, with Wall Street recording its best annual performances since 2013, boosted by hopes for a US-China trade deal.
New York rallied into the close, turning positive for the day and leaving the broad-based S&P 500 and tech-heavy NASDAQ Composite up 29 percent and 35 percent respectively for last year, the best showings in six years.
Key European markets showed increases of 25 percent or more for last year, partly thanks to late surges on receding recession fears and easing China-US trade tensions.
However, Brexit-hit London trailed its peers with a 12 percent annual rise, less than half the percentage increase managed by Paris, Frankfurt and Milan.
Earlier on Tuesday as US markets were about to open, US President Donald Trump tweeted that a partial trade deal with China would be signed in Washington on Jan. 15, ending some of the uncertainty about efforts to cement the deal announced early last month.
Prudential Financial Inc market strategist Quincy Krosby told reporters that the US-China detente could help decide the direction of the global economy next year.
“Much of the enthusiasm in the market is based on the idea that global growth is going to begin to accelerate, albeit slowly,” she said. “The question will be: Do we actually see positive growth, especially in China?”
Demand in China is crucial to chances for growth in global trade, while a China trade agreement could see US corporations begin investing again after a year when corporate capital spending stagnated worryingly, Krosby said.
Asian stock markets closed mainly lower on Tuesday, with Hong Kong’s Hang Seng Index ending a half-day of trading almost 0.5 percent down, although it rallied more than 7 percent last month. Tokyo was shut for a public holiday.
“While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020’s uncertainty,” AxiTrader Ltd chief Asia market strategist Stephen Innes said in a client note.
Asian investors were also watching for significant policy announcements early in the New Year.
In a New Year’s speech yesterday, North Korean leader Kim Jong-un struck a decisively militaristic tone, warning of a new strategic weapon and “shocking” action.
Analysts said all eyes were on nuclear-armed Pyongyang’s threat of a “new way” after its end-of-year deadline for sanctions relief from the US expired.
An address by Chinese President Xi Jinping (習近平) would be followed closely.
Elsewhere on Tuesday, oil prices slid, despite reports that Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz — a chokepoint for one-third of the world’s seaborne oil.
Over the year, the price of Brent North Sea crude jumped by almost one-quarter and the New York benchmark contract West Texas Intermediate soared more than one-third in value, helped by tighter supply.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure