While Switzerland was celebrated: So ended the US Stock Exchange | 1:01:19

Of course, this could not change the fact that 2018 was the weakest year for Dow & Co since the financial crisis.

The Dow Jones index improved 1.1%, or 265 points, to 23,327 points after a series of extremely volatile trading days. It was driven by larger gains from heavyweights Boeing (+ 1.9%) and Goldman Sachs (+ 1.5%). The S & P 500 gained 0.8%, as did the Nasdaq composite.

Nearly 982 (Friday: 893) million shares were converted. There were 2,153 (1,936) shareholders and 868 (1,069) losers on the New York Stock Exchange. Unchanged closed 54 (69) titles.

Investors were encouraged by a tweet from the US president Donald Trump of the weekend. According to him, there has been "great progress" in a phone call with Chinese President Xi Jinping. "As long as they talk to each other, it's positive for the market," commented Geoffrey Yu, asset manager at UBS, who said: "After a few hectic weeks, the market has regained momentum. certain stability. "

However, there were also skeptical voices that Trump with his tweet could only calm the markets. The Trump administration also had voices that did not want to talk about progress unless China provided details on the changes in its trade policy.

Elsewhere, there was a combination of business buying and so-called shop window decoration as a course conductor. Large investment companies then buy well stocked stocks to improve their annual performance.

Skepticism remains

Only a few actors wanted to talk about a turnaround given the recent rise in pessimism with regard to the global economic outlook and tighter rules. monetary policy not only in the United States. With this in mind, only the weakest activity of the manufacturing industry had just been reported in China this weekend. In addition, the budget dispute continues to erupt as a result of a partial halt by state authorities. The market expert, Yu, expects another year of volatility in the markets.

After all, market strategist Colin Cieszynski of SIA Wealth Management expects the market to rise once the US budget dispute is settled.

The magnitude of the mood that has deteriorated over 2018 is also explained by the fact that the Dow has fallen for the first time since 1978, having won over the past three years. first quarters. For the S & P 500, this trend was evident for the first time since 1948.

At the end of the year, the oil market changed little after a very turbulent year. The barrel of the American variety WTI fell 0.2% to $ 45.41. After a sharp rise, oil prices have fallen sharply since October due to chronic oversupply of oil and rising demand in the face of declining economic signals.

At the peak of the year, the barrel of the American variety WTI costs about 76 dollars. Percent, it was a crash of nearly 40%. When OPEC and Russia decided to reduce their subsidies in December, prices initially stabilized somewhat and then fell again. Compared to the price of oil at the beginning of the year, the least is about 25%. In this context, the energy sector index of the S & P 500 indexes fell by 20% in 2018.

The weakest annual report since the Lehman bankruptcy in 2008

Continuing problem of burden – not just on US stock exchanges – 2018 was the trade dispute between the United States and Donald Trump with China. Punitive tariffs applied to imports from the other country, which subsequently charged each other, not only gave rise to the concern of the United States. a slowdown in the economy, but also showed concrete signs of a slowdown in the Chinese economy. But as it has some kind of locomotive function for global growth, the repercussions on the US stock market are not enough. Instead of a year-end rebound, prices continued to fall and hit their lowest level in December, the lowest in the year.

The Federal Reserve's (Fed) policy of raising interest rates and the increasingly serious political conflicts in Washington at the end of the year, such as the US budget conflict, led to a partial closure of the government.

The Fed has raised its interest rates four times in 2018, the latest one being marked by the increasingly secretive criticism of US President Trump for his central bank chief, Jerome Powell. But not only Trump, and especially a few stock market players, has recently feared that the Fed will eclipse and take the risk of stifling the economy. The fact that central bankers have hinted at the prospect of two interest rate hikes in 2019 instead of three so far has not comforted, as expectations have already fallen to as high as a rise in interest rates. interest in the market.

The Dow Jones index lost about 5.6% in this contrasted situation in 2018, after rising to 25% in 2017. This was only the second year since the Lehman bankruptcy in 2008. At that time, the leading indicator had dropped by 33% in 2015, after which it had dropped to only 2.2%.

The S & P 500 fell 6.2% this year, while the Nasdaq index was still the best performing, down 3.9%. What initially seems disappointing and at the same time not exciting, appears in a different light if you take a closer look at the curves. The Nasdaq composite, with a high technological content, was 16% higher than its annual peak of August 30 compared to the beginning of the year. On October 3, the Dow Jones index had reached its highest level, at least 9% higher than in early January. In other words, the Nasdaq index lost about 19% of its annual peak during the fall, the Dow about 13%.

Tax cuts boost US equities

The fact that US stock markets have performed even better on an annual basis than, for example, many European stock exchanges, is largely due to the tax cuts imposed by President Trump earlier this year. Not only has this increased corporate profits, but many companies have also invested the money saved from taxpayers in share buybacks, which ultimately led to a further increase in earnings per share. action.

$ 203.8 billion was spent in the third quarter alone, up 58 percent from a year ago, and also the third consecutive quarterly record, according to Dow Jones index data. QUALCOMM and Apple have bought back their shares: QUALCOMM alone has spent $ 21.1 billion in the third quarter and Apple $ 19.4 billion.

The collapse of the fall, caused initially by the escalation of trade disputes between the US and China, has particularly affected the values ​​of the technology sector as well as that of the automobile, because China had imposed punitive tariffs on car imports. The downward movement has been exacerbated by rising signs of slowing economic growth in China. But weak data also came from Europe and the US economy was not free of weak signals.

The annual balance of Apple is not worse than the Dow

The mood has become completely gloomy, Apple having announced since November 1, with the release of the third quarter figures, that it was no longer a global economic indicator, does not want more announce detailed sales figures. This immediately prompted speculation that it may not be good for sales figures, especially for iPhones, and have hit waves on almost every stock exchange in the world. Again and again, in the episode, reports report of alleged reduced orders from Apple suppliers 24 hours a day.

The title Apple has almost one direction. From $ 221 in early November, it dropped to $ 157.74, a drop of nearly 29%. At the height of the year, the paper had even cost $ 233. But as the highs were well above the price at the beginning of the year, the annual balance sheet of the stock is almost unchanged with a drop of around 6% and is not worse than the one Dow.

It seems a little different on Facebook, because here, the annual report with a disadvantage of about 25% is already very bad, the crash of the peak of the year in July to $ 218, with nearly 40%, of course, much worse. Titles such as data scandals, hacker attacks, security leaks, fake user accounts or imminent digital taxes ended the course.

It was much better with two other representatives of the famed FAANG family of Facebook, Apple, Amazon, Netflix and Google. The Netflix streaming service receives an influx of influx equivalent to the Internet giant, Amazon. In summary, in 2018, prices also recorded impressive gains of 39% and 29% respectively, although the annual highs in both cases were also significantly higher than the closing prices.

While the Dow Jones defensive stocks outperformed their respective Pfizer and Merck & Co performances by nearly 40% and nearly 40%, Goldman Sachs led the list of losers as the stock price fell. since the beginning of the year. down 33 percent. However, Goldman Sachs was not alone. Also for the other bank shares, 2018 was a sluggish year. In addition to the deteriorating economic outlook, prospects for an end to the upward trend in interest rates in the United States, which has resulted in lower bond market yields, also embarrassed. On annual highs above 3.20%, the ten-year yield for the last two months of the year fell to 2.68%, its lowest level since the end of January. Traditional banking is more profitable when interest rates are higher.

NEW YORK (Dow Jones)