| By Charles Riley • Monday, December 30 | | | | Good Monday morning. In today's newsletter: How the past year and decade stack up for US stocks, Tesla hits a milestone in China and what the super wealthy are doing with their money.
US stock futures are little changed. Markets in Europe were lower in early trading, while stocks in Asia finished mixed. Japan's Nikkei shed 0.8%.
▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. | | | What's happening now in markets: MARKET DATA AS OF 6:30 AM ET | | MARKET FLASH US stocks had a fantastic year
Although there are still two more trading sessions before the books close, it's safe to say that US stocks had a tremendous year in 2019, with all three major indexes climbing over 20%.
The Nasdaq rallied the most of the three major stock indexes, on track for a 36% gain this year, which would also be its best performance since 2013. The index recorded its longest winning streak since July 2009 last week and climbed above 9,000 points for the first time.
Also strong: The S&P 500 is up some 29% this year, on pace for its best performance since 2013. The Dow, meanwhile, climbed nearly 23%, its best performance in two years.
Here's what Edward Moya, a senior market analyst at Oanda, told my colleague Anneken Tappe about what investors are looking for next year:
"The playbook for 2020 will be for stocks to rise higher as markets firmly believe the Fed will be on hold, credit markets are healthy, the consumer is strong and some of the key headwinds in 2019 are becoming tailwinds," said Moya. | | Of course, 2019 also marks the end of the decade.
And how did the 2010s stack up against previous decades? According to the Wells Fargo Investment Institute, the S&P 500's cumulative total return over the decade was 253%.
That may seem like a standout performance, but in reality it's only middling. The index generated bigger returns in the 1950s (515%), the 1990s (446%) and the 1980s (415%).
The laggards include the 1940s (147%), the 1960s (118%) the 1970s (74%) and the 1930s (2%). The 2000s, when average returns were -4%, round out the bottom of the ranking.
Here's what the Wells Fargo analysts had to say about the 2010s: "Depending on who is asked, this decade's return has been driven by a number of factors, including rising earnings, low interest rates, money-printing by the Federal Reserve, stock buybacks from companies, and more recently some valuation expansion.
Our analysis shows this return has actually been driven largely by fundamentals, primarily by a decade of U.S. corporate earnings growth, and secondly by dividend yield." So there you have it: A timely reminder to stay focused on the fundamentals in 2020. | | VOICES On why 2019 IPOs failed to live up to the hype "For the biggest companies that went public, investors really focused a lot more on the timeline to profitability and the quantum of current losses."
ANTHONY KONTOLEON OF CREDIT SUISSE
Read more from the Wall Street Journal on why IPOs failed to impress
| | THE RACE TO ELECTRIC Tesla takes a big step forward in China | |
Tesla broke ground on its Shanghai factory less than a year ago. Now, it's producing cars for customers.
Fifteen employees of the electric carmaker become the first customers to receive Model 3 sedans produced in China during a ceremony at the factory on Monday.
Wang Hao, general manager for Tesla China, said that more cars will be delivered to workers over the next few days. Other customers will begin receiving them next month.
Special bonus: One Tesla employee who received a Model 3 proposed to his girlfriend at the ceremony. He lifted the car's hood, revealing flowers underneath, before asking her to marry him. (She appeared to agree.)
Why it matters: Tesla isn't new to the Chinese market — it's been delivering cars to people there since 2014. But CEO Elon Musk has touted the new factory as a "template for future growth." Tesla eventually make 500,000 cars a year in Shanghai.
China's car market has slumped recently, but it's still the world's biggest.
What's next for Tesla: Musk is planning a second foreign factory in Berlin that will take the great electric car race to the manufacturing heart of Europe.
| | UP NEXT
Pending US home sales for November will be released at 10:00 a.m. ET.
Also today → NIO results will be published before the opening bell.
Coming tomorrow: The final US trading day of 2019.
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WHAT WE'RE READING AND WATCHING
▸ Bank of England chief Mark Carney issues climate change warning (BBC)
▸ Big Tobacco is living on a vape and a prayer (Bloomberg)
▸ Spotify will stop running political ads in 2020 (CNN Business)
▸ Why 2020 will be a turning point for electric cars (WSJ)
▸ Fake online clicks are costing companies (FT) | | | FINAL WORD The decade of the incredibly expensive home
The Wall Street Journal has a fascinating story on a segment of the US real estate market that has thrived in the years following the great recession: incredibly luxurious homes targeted at the global billionaire elite.
The stats, per WSJ:
"So while the number of sales are falling in many luxury markets across the country, six homes in the U.S. have closed for $100 million or more so far in 2019—the highest number for a single year. In 2010, there were none."
"Home sales of $50 million or more used to be an anomaly, with two or less each year in the early 2000s, according to Miller Samuel, a residential appraisal and consulting company. In 2014 that figure spiked to 23, and hasn't fallen below 12 since."
The big picture: There are now enough super wealthy people, many of them based outside the United States, to support this niche market even through an economic downturn.
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