So Unique

U.S. markets rallied to record highs again, and 2019 is shaping up to be the rarest of years.

The Market Sum | Insight after the bell By Caleb Silver, Editor in Chief Monday's Headlines 1. U.S. markets make new record highs as China lowers tariffs 2. Boeing CEO is ousted as crisis deepens 3. Buffett protege is named new GEICO CEO 4. 2019 has been the rarest of years 5. Which currency pair owned the decade? Markets Closed Dow 28,551.53 +0.34% S&P 3,224.01 +0.09% Nasdaq 8,945.65 +0.23% VIX 12.68 +1.36% Bitcoin $7,358.42 -1.02% US 10-Yr Yield 1.935 +0.94%     Markets Today U.S. markets rallied to record highs yet again (The 32nd time this year for the S&P 500), as China announced this morning that it is cutting tariffs on 850 commodity imports as of January 1, 2020. Trading volume was light due to the Christmas holiday on Wednesday followed by Boxing Day on Thursday. U.S. markets will close at 1 p.m. tomorrow, so expect the tranquility to continue.   There may be more good news in store for stock investors if you believe in Santa... or the Santa Claus rally, as it is known. According to the Stock Traders Almanac, during the final five trading days of the year and the first two tradings days of the new year, the S&P 500 has posted a 1.3% gain on average since 1950. Past performance is no guarantee of anything, but the recent trend in the stock market sets up nicely for the Santa rally to stay true to form.   Headlines China is cutting tariffs on 850 key commodities, including frozen pork, semiconductor products, avocados, and pharmaceuticals, starting Jan. 1. Analysts believe this is in order to spur domestic consumption. Although the statement from the Finance Ministry doesn't mention the U.S., it can be assumed this is also a move to increase the amount of American goods imported without upsetting other trade partners. The Chinese state-backed National Integrated Circuitry Investment Fund also said it will cut its stakes in some tech firms. Boeing's (BA) CEO Dennis Muilenburg resigned today as the aerospace company has struggled to regain the trust of regulators, customers, investors, and the public in the wake of two fatal crashes of its plane, the 737 Max. Chairman David Calhoun will take over as CEO on January 13, and board member Lawrence Kellner will become the company's non-executive chairman, according to a press release. Shares of Boeing rose more than 2% on the news. U.S. sales of newly built homes increased 1.3% in November from the prior month, as low mortgage rates are pushing up purchases as well as prices. The Commerce Department said Monday that new single-family houses sold at a seasonally adjusted annual rate of 719,000 last month. Sales surged in the Northeast and West, but they were flat in the Midwest and fell in the South. New-home sales have increased 9.8% so far this year.  Tesla (TSLA) and a group of Chinese banks have agreed on a new 10 billion yuan ($1.4 billion), five-year loan facility for the automaker's Shanghai car plant, Reuters reports. Tesla broke ground on the factory in January and has started producing vehicles from its Shanghai plant. It aims to build at least 1,000 Model 3 cars a week by the end of this year. BlackRock (BLK), the world's largest asset manager, is set to establish a joint venture wealth management company in China with Temasek Holdings and China Construction Bank, according to Reuters. BlackRock and Temasek will be majority stakeholders. China opened its $43 trillion financial sector to foreign companies earlier this year.         chart courtesy WSJ.com   2019 - The Rarest of Years With just a few trading days left in the year, 2019 will be remembered for a lot of things, but the 28% return in the S&P 500 will be one of them. Barring the unforeseen, 2019 will rank as the 6th best year of returns for the S&P 500, but it will also be a year where four market forces came together in a most unusual way. I borrowed the chart above from the Wall Street Journal because it shows so clearly that 2019 will be the first year that the following happened: The broader market (S&P 500) rose more than 20 points The yield on the 10-year U.S. Treasury fell more than 0.75% Gold prices have risen more than 10% Oil prices have risen more than 10%   Typically, when stocks rise 10% or more in a year bond yields fall, but not by this much. Gold, which is often seen as a safe haven during volatile times in the stock market and the economy, has risen despite the outperformance of stocks and the relative stability of the global economy. You can thank the trade war for that since it has kept investors on their toes all year. And when oil prices rise by double-digits or more, it is typically a concerning sign for stock investors since higher oil prices can lead to higher fixed costs for companies, which erode their profit margins.    But 2019 has been very different, and the Federal reserve has made it that way. The Fed cut interest rates three times in 2019 to "keep the economic expansion sustained", which drove investors into stocks, particularly technology stocks.     But the uncertainty around the trade war between the U.S. and China kept scaring investors back into U.S. Treasuries and gold, typically considered safety assets.   Meanwhile, as oil prices continued to fall in what has been a multi-year long trend, OPEC and its allies have been cutting production and supply, hoping to push crude prices back up. It has worked, but it is not sustainable over the long term.   Still, this rare confluence of events has produced the rarest performance of these asset classes in history. We have no idea what 2020 will bring, but the global economy and markets had remarkable shifts in 2019, and we may never be the same.     chart courtesy YCharts   The Currency Pair of the Decade The U.S. - China trade war and currency battle gets all the press, but it has not been the best trade of the past decade. In other words, it has not had the best returns for traders who bought the U.S. Dollar to Chinese Yuan pairing. As foreign exchange (forex) traders know, currencies are always traded in pairs, one against the other. Traders look for opportunities for pricing mismatches and buy one or multiple currencies to look for price arbitrage. It's way more complicated than that, so if you want to take the deep dive, jump in here: Intro to Forex Trading.   Our friends at YCharts have assembled some terrific end of the decade charts, and we liked the one above in particular.    The best currency pair trade of the decade has been the U.S. to Euro Exchange. The U.S. to Canadian Dollar has also been strong, as has the Dollar/Yen and the Dollar to Pound Sterling.    One of the worst currency pair trades has been the U.S. to Chinese Yuan pairing, returning only 3% over the past decade. What's Open and Closed this Week? It's a short week for markets next week as markets around the world will be closed. Take a look at the table below for details on which markets are closed when.     More News: Online Broker Robinhood Hit With $1.25 Million FINRA Fine Stock and ETF Volumes Are Huge Right Now No Bottom in Sight for Online Broker Stocks chart courtesy YCHARTS     Oil exploration and production company Apache rocketed up by 17.5% today. The rise came after it announced joint venture in Suriname with fellow energy firm Total. This comes after news earlier this month that boded negatively for its Suriname operations. Rising oil prices have also buoyed Schlumberger, Hess, and National Oilwell Varco, among others, which rose 3.5%, 3.1%, and 3.1% respectively.     Cosmetics company Coty fell 4.1% today. Used-car retailer CarMax continued to fall after last-week's earnings miss, falling another 3.8% today. Packaged-foods company Conagra Brands brands gave up some of last-week's rise today, falling 3%. Word of the Day Asset Allocation Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon. The three main asset classes - equities, fixed-income, and cash and equivalents - have different levels of risk and return, so each will behave differently over time.     Today in History December 23, 1913 Today in 1913 President Woodrow Wilson signed the Owen-Glass Act, which created the Federal Reserve System. The Federal Reserve is an independent federal agency created to ensure that the U.S. money supply stays steady, set interest rates, and keep an eye on the overall availability of credit. The Federal Reserve standardized how banks would work in the U.S., which had previously operated in a wide variety of different ways, resulting in 4 major financial crises in the previous 40 years. The Federal Reserve was the first central bank in the United States in over 70 years, since the charter of the Second Bank of the U.S. ended in 1836.    https://www.loc.gov/item/today-in-history/december-23/ How can we improve the Market Sum? Tell us at marketsum@investopedia.com Enjoy the Market Sum? 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