It was a good year, overall, for the global stock market. The major indices in most of the largest economies rose between 5 and 20 percent. In many cases, indices that showed losses last year recovered during 2019 and continue to rise as the fourth quarter continues. Who were the biggest gainers and losers for the year, and what are the key events to follow in order to predict how 2020 might turn out? Here's a quick list of trends that are continuing to have an effect on global markets:
The U.S. Election
The uncertainty of the current U.S. election cycle has caused indices like the Dow and the S&P to become more volatile than usual. While most U.S.-based indices are up significantly for 2019, it's been something of a roller-coaster ride for the buy-and-hold crowd. Likewise, many newer investors have been scared off from U.S. and other markets due to a general feeling of uncertainty and volatility. With the Democrat Party primary process underway, U.S. voters are choosing a candidate to challenge President Trump in the fall of 2020. The Republicans will not have a primary, but the atmosphere in any election run-up is usually a damper for the U.S. stock market.
Two years ago, UK voters went to the polls and decided to leave the European Union. The country's political process has been slow to respond to the will of the voters and continues to discuss variations on how to formally leave the economic block. The uncertainty related to the outcome of that political wrangling has slowed down the British economy and made many international investors reluctant to invest in the nation's markets.
Some Geographic Areas are Lagging
Great Britain, Spain, and many nations in Eastern Europe have been slowed down by their own economic problems. In addition to the Brexit fiasco, which is still unresolved, local economic slowdowns have kept these areas from enjoying the growth that the U.S., Asia and much of the rest of the globe has seen. Pakistan, Kenya, Hong Kong, Korea and India were individual market indices that showed either low or negative growth for 2019.
China, Australia, Russia, Switzerland, France, Netherlands, Germany, Canada and the U.S. were the big winners for the year. Each one of those markets showed overall growth rates between 10 and 25 percent. Most also has positive growth in 2018, so there was no need to make up for lost ground.
Online Trading is Increasing
The volume of online share trading continues to rise as more third-world economies get connected to the World Wide Web. This phenomenon has a number of effects on global markets, most of them good. All the major brokerage houses have been online for decades, so there's nothing new in that sense. However, for individuals who trade stocks, bonds, commodities and other instruments from personal computers, the trend is an important one. The number of individual investors is growing, and as the world gets closer to a global web connection rate approaching 90 percent of all homes, the sheer volume of personal investment funds creates a more vibrant, larger market.