Via Financial Times

US stocks opened on a bright note on Christmas Eve, adding to gains that have made this the best year for equities since 2013.

Traders on Wall Street were checking in for a shortened session on Tuesday, with stock markets due to close early at 1pm New York time, and bond markets an hour later.

The S&P 500 index opened about 0.1 per cent higher, before giving up those gains in early trading. The benchmark has returned about 29 per cent so far this year — not far from the 29.6 per cent annual gain of 2013 and the 31 per cent of 1997. Risers were led by blue-chips including chipmaker AMD, which was boosted by a broker upgrade, and clothing retailer Gap.

The technology-focused Nasdaq market is going for 10 straight days of gains, which would match its best run since the summer of 2017.

The “Santa rally” could well extend into 2020, said Edward Moya, senior New York-based analyst at Oanda, a foreign-exchange specialist. Markets “firmly believe the [US central bank] will be on hold, credit markets are healthy, the consumer is strong and some of the key headwinds in 2019 are becoming tailwinds,” he said.

Analysts note that the baseline is flattering: markets sold off heavily during the fourth quarter of 2018, as investors began to fret that the US Federal Reserve had tightened monetary policy too much, too soon. But a renewed burst of stimulus this year from the Fed — under the urging of US president Donald Trump — put a rocket under all sorts of assets.

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Bonds were boosted too, before paring gains towards the end of the year. The US 10-year Treasury was trading at a yield of about 1.94 per cent on Tuesday, down from 2.68 per cent at the turn of the year. Yields move inversely to price.

“2019 was the year where everything worked — stocks, bonds, gold, even bitcoin,” said Nicholas Colas, co-founder of DataTrek Research, in a note to clients.

European stock markets were mostly flat on Tuesday, on thin trading volumes.

The pound steadied, rising very slightly against the US dollar at $1.294, after a tumble of about 3 per cent over the past week. That fall — the worst stretch for sterling in more than three years — came after traders reassessed the risks for the currency, which had risen after the emphatic victory for Boris Johnson’s Conservatives in the UK general election.

Gold climbed against the dollar, on track for its best year since 2010, when it rose 30 per cent. Gains so far this year come to 16 per cent. Bitcoin roughly doubled in price over the year, to about $7,380.

In Asia, Chinese stocks saw some relatively solid gains of about 0.7 per cent, as premier Li Keqiang played host for trade talks with Japanese prime minister Shinzo Abe and South Korean president Moon Jae-in.

The Nikkei 225, the Japanese benchmark, closed fractionally higher.

Masatoshi Kikuchi, chief equity strategist at Mizuho Securities, noted that recent days have seen a strong run of initial public offerings, as companies including WILLs, a corporate investor relations support provider, and Space Market, a platform for renting unused real estate, have traded much higher than their offering prices. “The success of these IPOs demonstrates that investors are attracted to start-ups that are changing Japan’s socio-economic structure,” he said.

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The US stock market will be closed on Wednesday for Christmas. Thursday and Friday are regular trading days.