Openwork Market Update 03/01/2020



Happy new year!

Welcome to the latest market update, which marks the end of December, the end of 2019 and the end of the 2010s decade – despite being 20 years ago now, it seems like only yesterday that we were worried about how clocks, computers, etc. were going to survive the turn of the millennium!

This reminded us of a couple of stories at that time:

  • On New Year’s Eve in 1999, Scottish air traffic controllers called the emergency room in London to say their radar had failed as they could see no aircraft.  The radar was actually working perfectly.  All flights had been cancelled because of fears that planes or airports would fail at midnight because of the “millennium bug”.
  • A lady from Minnesota was invited to join a kindergarten class because according to a computer she was four. Aged 104, she decided against it!

 

Anyway bringing it back to now. December was a positive month for global equity markets which rounded off a really strong year and what has turned out to be an exceptional bull market decade for equities.

  December 2019 Full Year 2019 Decade – 2010 to 2019
FTSE 100 (UK) +2.7% +12.1% +39.3%
Dow Jones 30 (US) +1.7% +22.3% +173.7%
S&P 500 (US) +2.9% +28.9% +189.7%
DAX (Germany) +0.1% +25.5% +122.4%
Euro Stoxx 50 (Europe) +1.1% +24.8% +61.7%
Nikkei 225 (Japan) +1.6% +18.2% +124.3%

 

In terms of currency, £ Sterling ended December at 1.33 US Dollars.  This was 2.5% higher than the figure at the end of November and 3.9% higher than the figure at the end of 2018. Against the Euro, £ Sterling ended December at 1.18 Euros, which was 0.8% higher than the November closing figure and 6.4% higher than the end of 2018.

 

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 1.5% in November 2019 (this is November’s data which is reported in December).  This was unchanged from the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was also 1.5% in November, again unchanged from the previous month.

 

The Bank of England maintained interest rates at 0.75% in December.  The last change was an increase in August 2018.  This means long-suffering deposit savers are likely to continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.

 

With external influences remaining uncertain, it is likely to remain a volatile period for investors.

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