(Adds gold, oil settlement prices)
* World stock gauge notches 24% gain in 2019
* Trump announces signing of trade deal in mid-January
* Dollar slides as investors buy trade-sensitive currencies
* China December manufacturing activity beats expectations
* Gold, up 18% for year, posts best year since 2010
By Herbert Lash
NEW YORK, Dec 31 (Reuters) - The dollar slid to a six-month
low on Tuesday as progress on U.S.-China trade tensions led
investors to higher-risk assets, while a year-end rally that
pushed global equity markets to record highs petered out on the
last trading day of 2019.
The year was remarkable for investors, as many equity
indices, long-term bonds, oil and gold posted double-digit
gains.
U.S. President Donald Trump said the Phase 1 trade pact with
China would be signed on Jan. 15 at the White House, though
confusion remains about details of the agreement. Stocks for a second day in a row failed to rise on the news
as they have for most of December, with hopes of an imminent
deal a key factor for lifting a gauge of global equities to its
best year since 2009, up almost 24%.
MSCI's all-country world index .MIWD00000PUS of equity
performance in 49 nations fell 0.18 points or 0.03 percent, to
564.2. The index is just under 4 percentage points from an
all-time high set on Friday, when U.S. stocks also posted record
peaks.
The breakthrough in U.S.-China trade talks and a British
election earlier in December pointing to a smoother exit from
the European Union have boosted investor sentiment, but the
outlook for equities next year is not as buoyant, said David
Kelly, chief global strategist at JPMorgan Asset Management.
"This is a year in which everybody will celebrate," he said.
Going forward, however, it will be hard to achieve similar
gains, with U.S. equities likely to advance by mid-single digits
annually for several years, Kelly said. International markets,
especially emerging markets, are poised to do better, he said.
"The U.S. stock market rally could continue but at some
stage there's going to be a significant correction, and the more
it goes up the more it's going to correct," he said.
In shortened trading sessions ahead of New Year's Eve
celebrations, the pan-European STOXX 600 index .STOXX closed
down 0.08%. French .FCHI , British .FTSE and Spanish .IBEX listed
stocks lost between 0.1% and 0.7%, while Frankfurt .GDAXI and
Milan .FTMIB bourses were shut for the year-end holidays.
On Wall Street, the Dow Jones Industrial Average .DJI fell
29.73 points, or 0.1 percent, to 28,432.41 and the S&P 500
.SPX lost 0.77 points, or 0.02 percent, to 3,220.52The Nasdaq
Composite .IXIC added 11.73 points, or 0.13 percent, to
8,957.72. Emerging market stocks lost 0.29%.
Bourses in Asia diverged. China mainland stocks .CSI300
.SSEC gained 0.4% after data showed manufacturing activity in
the world's second-largest economy expanded for a second
straight month in December. China's Purchasing Managers' Index (PMI) showing economic
trends in the manufacturing and service sectors, was unchanged
at 50.2 in December from November, but still remained above the
50-point mark that separates growth from contraction.
In Hong Kong, stocks .HSI fell 0.5% as protesters geared
up for pro-democracy rallies on New Year's Eve. Markets in Japan and South Korea were closed for a holiday.
The dollar's slide came close to wiping out the year's
gains, as the pound and a clutch of trade-sensitive currencies
rallied on improving U.S.-China trade relations and the outlook
for global growth. The dollar also fell, as one of the biggest bets in the FX
market for 2020 is shorting the U.S. currency.
"We could be right at a turning point where global growth
re-accelerates relative to U.S. growth, and that could mean a
weaker dollar over time," Kelly said.
The dollar was strong for much of 2019 thanks to the
relative outperformance of the U.S. economy and investors'
preference for a safe-haven currency amid the trade dispute. But
the dollar's gains for the year shriveled in December.
Investors bought up currencies linked to global trade,
sending the Australian dollar, Chinese yuan and Scandinavian
crowns to multi-month or multi-week highs against the greenback.
The dollar index .DXY , which tracks the greenback against
a basket of six currencies, fell 0.251 point or 0.26 percent,,
or 0.27 percent, to 96.489 and the euro EUR= was last up 0.18
percent, at $1.1217.
The Japanese yen JPY= strengthened 0.22% versus the
greenback at 108.65 per dollar, while Sterling GBP= was last
trading at $1.3238, up 0.95% on the day.
The weak dollar helped lift spot gold XAU= to its highest
since Sept. 25 at $1,525.20 an ounce. The metal was set to post
its biggest yearly gain since 2010, rising more than 18%.
U.S. gold futures GCv1 settled up 0.3% at $1,523.10.
The benchmark U.S. Treasury 10-year note US10YT=RR fell
7/32 in price to yield 1.9192%.
Longer-dated Treasuries were on track to post their best
return since 2014, after concerns about the slowing U.S. economy
prompted the Federal Reserve to cut interest rates three times
this year. The move was a major reason for Wall Street's gains.
Thirty-year bonds returned 17.15% this year through Monday
.MERGA30 , according to Bank of America Merrill Lynch, while
10-year notes .MERGA10 have returned 9.03%.
Final data will not be updated until late on Tuesday.
Oil fell but was still on track for monthly and annual
gains, supported by a thaw in the prolonged U.S.-China trade row
and Middle East unrest.
Brent crude LCOc1 settled down 67 cents at $66.00 a
barrel, while U.S. West Texas Intermediate (WTI) crude CLc1
slid 62 cents to settle at $61.06 a barrel.
Brent has gained about 23% in 2019 and WTI has risen 34%,
their best yearly gains in three years.
Asian shares over the past decade https://tmsnrt.rs/2tdGbh8
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