Kristal Weekly Feed | 16th December 2019

In a hurry? Here’s a short summary of some major global headlines over the last week.

Positives

• Emerging Markets are set for growth in 2020
• After the election results, UK’s FTSE 250 hits a record high
• Saudi Aramco becomes the world’s first $2 trillion company

Negatives

• Stock markets NOT thrilled with the US-China Trade deal announcement this week

Now, for more detail.

Positives

1. Emerging Markets are set for growth in 2020

What You Should Know

Over the last decade, around $11 trillion was added to investor portfolios in emerging markets. This year, all emerging market assets like stocks, currencies, and bonds have managed to make a comeback after three years of losses. The US-China trade war was the primary dictator of global market movements this year. While this is dampened the developed markets to a certain extent, it has been a boon for the emerging markets. Heading in 2020, most experts are bullish about emerging markets.

What You Should Look Out For

The top three driving factors of emerging markets this year have been the US-China trade war, the economic growth outlook of China, and the Fed rate path. In the coming months, you must keep an eye out for these factors as any changes in them may affect the performance of the emerging markets.

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2. After the election results, UK’s FTSE 250 hits a record high

What You Should Know

This week, the results of UK General Elections were announced with the Conservative Party crushing the opposition in the biggest general election win since 1987. As a result, the FTSE 250 Index climbed to 21507.50 a rise of 3.44%. While many fund managers had withdrawn from the UK markets following economic concerns earlier this year, a turnaround had already started in October when Johnson gathered support for his ideas. The resounding victory has boosted the investor mood in the UK.

What You Should Look Out For

With the Brexit deadline extended to January 31, 2020, it will be important to keep your antennas ready as stocks might respond strongly to sudden changes in the Brexit policy.

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3. Saudi Aramco becomes the world’s first $2 trillion company

What You Should Know

On Thursday, Saudi Aramco’s shares surged higher reaching 38.70 Riyals (approximately $10.32) per share that took the valuation of the oil giant to $2 trillion. The shares had debuted on the Riyadh stock exchange on Monday through the biggest IPO ever. Around 97% of the investors were from Saudi Arabia.

What You Should Look Out For

Many experts believe that the company reached the $2 trillion valuation too soon and said that the company looked expensive. While the kingdom still owns around 98% of the shares of the company, many investors are worried about corporate governance. Experts believe that Aramco’s shares will level down eventually.

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Negatives

1. Stock markets NOT thrilled with the US-China Trade deal announcement this week

What You Should Know

On Friday morning, stocks around the globe rallied as the news of Phase One of the Trade Deal was released. However, this rally was short-lived as once the details of the deal were announced, the stocks were swooning in the negative zones giving up the early gains. Many experts believed that the fall was due to what was not there in the deal. There was a lot of build-up to the December 15 deadline as investors were expecting something more concrete. However, the current announcements have put a dampener on those expectations leading to a drop in the markets.

What You Should Look Out For

While this deal certainly reduces some tension between the US and China, it is clearly Phase One – which implies that we can expect more development in phases soon. Some experts believe that this deal puts the tariffs exactly where they were in May 2019. Investors are expecting a concrete deal that solves the problem for both countries. Keep an eye out for any announcements made by either Trump or Xi.

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