Goodbye 2019. After a year-long bull run and a series of record breaking, stock market ended the last day of 2019 on an upbeat note, with all three indexes in the black. Investors yawned at President Donald Trump’s tweet in which he said a “phase one” trade deal with China will be signed on Jan. 15 at the White House. Trump will also go to Beijing for negotiations on a “phase two” agreement at an unspecified point in the future. Investors cared more about consumer confidence, which missed economists consensus expectations in December. Elsewhere, Uber Technologies (ticker: UBER) and Postmates filed a lawsuit against the state of California, calling its AB 5 law on gig workers unconstitutional. In today’s After the Bell, we…
- check on consumer confidence in December;
- celebrate a good run for stocks in 2019;
- and look into 2020 with a watch list.
A Good Run
All three major indexes spent most of the day in the red, but raced in the final hour to finish the day with gains. The Dow Jones Industrial Average gained 76.30 points, or 0.27%, to close at 28,538.44. The S&P 500 edged up 9.49 points, or 0.29%, to end at 3230.78, and the Nasdaq Composite rose 26.61 points, or 0.30%, to close at 8972.60.
Market participants shrugged off the announcement of an official date for the trade deal signing, which was largely priced in already, and turned their eyes to the Conference Board Consumer Confidence Index instead.
Consumer confidence dropped by 0.3 points in December from the previous month to reach 126.5, short of economists’ consensus expectation for 128.0. November’s reading was revised up to 126.8 from the initial 125.5. Consumers became more optimistic about the present situation in December, but less so about the economy’s near-term outlook. Specifically, optimism about job creation and income gains dimmed.
“Consumers have overwhelmingly been the growth engine for the economy in the past year, as trade policy uncertainty weighed on business investment,” Jim Baird of Plante Moran Financial Advisors wrote on Tuesday. “With confidence edging lower, spending momentum may also fade a bit in the coming months.”
Job creation will likely to continue to slow in the coming year, said Baird, with the unemployment rate at a half-century-low 3.5% and employers experiencing increasing challenges in finding and hiring qualified workers. That could weigh on consumer confidence, but the stronger wage gains should offset some of that impact as employers compete to hire and retain workers.
“The bottom line is that even with a slight dip, consumers remain relatively upbeat in their view of the economy,” wrote Baird, “That should continue to support spending growth, helping the economy to weather the mid-cycle slowdown and continue to grow in 2020.”
This year has been a good one for stock investors. The S&P 500 rallied 28.9%, scoring the best annual run since 2013. Tech stocks were the best performers, while energy and health care were the worst.
Elsewhere around the globe, the Stoxx Europe 600 rose 23% to post its biggest one-year gain since 2009, while the Shanghai Composite finished the year up 22% for its best annual run since 2014.
For 2020, investors will have a lot to watch out for.
- The Federal Reserve and global central banks are staying put for now after easing monetary conditions earlier this year, but it’s hard to tell what course they’ll take next year.
- The U.S.-China trade war has de-escalated, but still hasn’t completely ended, and the phase-two negotiations will likely be much more challenging.
- The U.S. is having a presidential election, where Trump’s position is threatened by multiple Democratic rivals and his own impeachment proceedings.
- The U.K. will finally leave the European Union, but how the two sides will handle their future trade and economic relationships remains uncertain.
- North Korea might test more long-range missiles, while Hong Kong protesters continue to demand democracy in the city.
We’ll see you next year.
Write to Evie Liu at firstname.lastname@example.org
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