During the year of our lord 2019, stock indices across the globe had some of their best performances of the decade. Major indices in the US, Brazil, and Germany all increased by more than 20% in the year of the pig.
Markets letting their freak flag fly came as a bit of a surprise to investors. If you recall this time last year, the global economy was slowing, stocks (never forget 12/24/18), bonds, and commodities were plummeting, the trade war had investors weak in the knees and worries about WTF Jerry Interest Rates and the Fed would do in the new year had markets’ panties in a bunch.
Yet, like a stage-five clinger who just went off their meds, markets persisted. The S&P, Nasdaq, and Dow rose 29%, 35%, and 22%, respectively on the year.
Ready to crash?
“What could possibly go wrong?” – investors, probably
Despite the surge in 2019, investors are expecting markets to continue growing next year. Central bank policies have eased, the US economy proved to be more resilient than expected, and the official signing of a “phase one” trade deal between the US and China is coming at the beginning of January.
Still, potential headwinds remain. There is always a chance that the trade deal could blow up (spoiler: this will almost certainly happen), Brexit remains a royal pain in our asses, and the US election could throw markets for a loop.
The bottom line…
The ’00s called and they want their stocks back.
The two stocks that contributed the most to 2019’s total stock return were the same two stocks that contributed the most to the full decade’s total stock return. Meet Apple and Microsoft.
Apple and Microsoft contributed 8.19% and 6.59% to the S&P 500’s total return in 2019 and 5.77% and 2.68% over the decade.