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Last Week in Numbers: Volatile Stock Markets

It was another week of extreme volatility in the stock market.

Wall Street saw sharp declines on Monday, 24 December. However, on Wednesday, 26 December, immediately after the Christmas break, all US major stock market indices rallied back in style. The S&P 500 rose 5%, while the Nasdaq 100 had its best trading day in nearly a decade. All 30 Dow Jones Industrial Average constituents posted gains, while 99% of the S&P 500 stocks were up on the day.

Analysts point to a few things that might have sparked the renewed optimism. First, a White House official assured investors that the Fed Reserve chairman, Jerome Powell, would not get fired. Secondly, a new report suggested that the US delegation will visit Beijing in early January for trade talks.

Back in Singapore, factory output rose 7.6% in November, handsomely beating the forecast of a 4.2% growth. November’s growth also outpaced October’s 5.5% growth, which was revised up from an earlier estimate of 4.3%.

On a month-on-month basis, manufacturing output increased by 2.8%. The biomedical cluster was the biggest growth driver, expanding 18.5% in November from a year ago. Within the category, pharmaceuticals posted the largest growth of 23.9%. The electronics industry, which fell in September and October, regained some shine, increasing 11.2% last month.

While 2018 was the year that the trade war started, 2019 would be the year the global economy feels the pinch. The International Monetary Fund forecasts trade volumes will slow to 4% in 2019, from 4.2% this year and 5.2% in 2017. It remains to be seen whether China and the United States can strike a deal before the March 1 deadline.

It has been a difficult year for China stock investors. The benchmark Shanghai Composite Index is down nearly 25% from where it started the year, making it the world’s worst-performing major stock market this year. In total, almost US$2.4 trillion has been wiped out this year, the biggest on record since Bloomberg started compiling data in 2002. The closest loss in value was during the great financial crisis in 2008 when the Shanghai index plunged 65%.

Trading volumes in China have also declined this year, with average daily turnover of around 369 billion yuan (US$54 billion), the lowest since 2014. No industry was spared, with all 10 industry groups on the CSI 300 index down this year.

Lastly, according to Bloomberg’s billionaire index, the 500 richest people in the world lost US$511 billion this year. It’s only the second annual decline since the wealth index debuted in 2012. Facebook founder Mark Zuckerberg recorded the biggest loss, losing US$23 billion as Facebook shares plunged amid varying challenges. Jeff Bezos, the biggest gainer this year, made around US$16 billion, leaving him with US$115 billion at year-end.

The 173 US billionaires on the list lost 5.9% of their fortunes, while the 128 Asians on the list lost a combined US$144 billion. Wanda Group’s Wang Jianlin had the biggest loss in the Asian cohort, losing US$11.1 billion of his fortune this year.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia owns shares in Facebook Inc.