Market Analysis – December 2019


As the decade drew to a close, leading global markets finished the year in positive territory, with some reaching record highs as trade concerns eased. The finer details of a phase 1 US-China trade deal and Britain’s negotiation of a free trade agreement with the EU are key focuses for investors in Q1 2020. Hopes of concrete progress on the trade front were bolstered between Christmas and the new year, when White House trade adviser Peter Navarro said the US and China looked likely to sign a deal early in 2020.


In the UK, receding concerns around the US-China trade situation, Brexit and the British political landscape, fuelled market gains in December. The Conservative victory in the general election provided investors with clarity over Britain’s likely path for leaving the EU. The FTSE 100 posted monthly gains for the ninth month in 2019, ending the year up 12.1%, the FTSE 250 closed the year up 25%. Wall Street’s main indices were in record-breaking territory after President Trump said that “new trade deals and more” meant that “the best is yet to come“. The Dow ended the year up over 22%. The Nikkei 225 ended the year up 18.2%, meanwhile the Eurostoxx 50 closed 2019 up 24.78%.


On the foreign exchanges, sterling closed the year at $1.32 against the US dollar. The euro closed at €1.18 against sterling and at $1.12 against the US dollar.


Brent crude closed the year trading at around $66 a barrel, a monthly gain of 7.31% and an annual gain of around 23%. The catalysts behind the annual rally were the easing trade tensions and the ongoing supply cuts from OPEC (Organization of the Petroleum Exporting Countries) and other major oil producers. Gold is trading at around $1,517 a troy ounce, a gain of 3.65% on the month. The weak dollar helped lift gold to its highest price since September. The metal posted its biggest yearly gain since 2010, rising over 18%.


It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.


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