· Stocks surged on Friday on the back of U.S. jobs growth that easily topped analyst expectations as Wall Street wrapped up a choppy week of trading.
The Dow Jones Industrial Average was up 337.27 points, or 1.2% at 28,015.06. Friday’s performance was the Dow’s best since Oct. 4, when it rallied 1.4%. The S&P 500 closed 0.9% higher at 3,145.91 — its biggest one-day gain since Oct. 15 — while the Nasdaq Composite jumped 1% to 8,656.53.
Shares of 3M led the Dow’s strong gains, rising more than 4%. The energy sector was the best performer in the S&P 500, jumping 2%. Industrials and financials rose more than 1% each. Google-parent Alphabet closed0.9% higher and hit an all-time high. Apple shares also reached record levels, gaining 1.9%. Goldman Sachs shares jumped 3.4%.
Stocks also closed just below their record highs reached Nov. 27. The S&P 500 was just 0.3% away from hitting an all-time high. The Dow and Nasdaq are both 0.6% off their records.
· U.S. equities have been the best place to invest during the past 10 years, but that dominance could shift in 2020.
However, market experts think international stocks are poised for a comeback in 2020 versus the U.S. due to attractive valuations and a potential trough in global economic growth as world central banks take up more stimulative measures.
“Having underperformed for more than ten years, non-US stocks are set to gain the upper hand over their US peers,” Peter Berezin, chief global strategist at BCA Research, said in a note. “A reacceleration in global growth, a weaker US dollar, and favorable valuations should all support non-US stocks next year.”
This wide valuation gap comes as global economic growth has slowed down while the U.S. economy keeps humming. Last week, the Commerce Department said U.S. GDP expanded by 2.1% in the third quarter.
Economies around the world, meanwhile, have been stuck in the mud as manufacturing activity falls and trade conditions tighten.
The trade tensions between China and the U.S. have eased slightly in recent months as both sides show they are willing to reach some sort of deal. These moves could spur a resurgence in global economic growth, which would “disproportionately benefit” international stocks relative to the U.S., BCA’s Berezin said.
“The sector composition of international stocks is more skewed towards cyclicals than defensives compared to US stocks,” Berezin said. “As a result, non-US stocks generally outperform their US peers when global growth accelerates.”
To be sure, global stocks may be pricing in these scenarios already.
· Asia stocks traded higher Monday morning as China’s exports declined in November for the fourth consecutive month, Reuters reported citing customs data.
The Nikkei 225 in Japan rose 0.33% in early trade while the Topix index gained 0.36%. South Korea’s Kospi also added 0.13%.
Meanwhile, shares in Australia gained in morning trade, with the S&P/ASX 200 up by 0.2%.
Overall, the MSCI Asia ex-Japan index traded 0.08% higher.
Reference: CNBC, Reuters
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