Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.
It is the last trading day of the year, and What it’s been a year.
It started with the GameStop drama, when retail investors crammed into memes stocks and battled hedge funds. It has been dominated by the pandemic, with vaccines allowing economies to reopen, … and new variants of Covid-19 resulting in travel restrictions, blockages and supply chain disruptions.
Equity markets rallied as corporate earnings held up. Commodities surged, pushing up costs for businesses.
Central banks continued to stimulate their economies throughout the year, lifting markets, before persistent high inflation forced some to change course.
The result – Britain’s blue chip FTSE 100 The index gained more than 14% as it recouped its losses at the start of the pandemic, one of its best performances in the past 20 years.
Today is a half day session, so we’ll have the final score at lunchtime.
Frankfurt and Tokyo wrapped things up yesterday, with Germany DAX gaining 16% and Japan Nikkei up 4.9% to its highest year-end level since 1989.
Wall Street experienced a one-year crash, with the S&P 500 the index rose about 27% as tech mega-companies generated gains.
2021 has been a strong year for equity returns, says Richard Lin, CIO at Digital Wealth Manager Moneyfarm.
The second half of the year saw a little more volatility than the first half – largely thanks to the Omicron variant causing uncertainty – but countries like the United States, Europe and Japan experienced strong growth.
But the picture is a bit different for emerging markets and the Asia-Pacific region, Flax adds:
EM performed negatively in 2021, with the problems really starting in early summer.
China is the main reason for this decline in performance – the two main issues affecting the group’s largest economy are the resurgence of Covid-19 and disappointing economic growth figures. The Chinese government’s crackdown on big tech companies has also impacted the country’s ability to function economically.
We will follow the action until the last day of the year and we will look to 2022.