After a bullish 2017, 2018 was nothing of that. It will be a year many investors will want to forget. This is because most projections from analysts have not worked out well. This article will highlight a few of the most important market events that happened this year.
Trade was the biggest news this year. It all started early in the year when the Trump administration started imposing tariffs on key imports. The first set of tariffs were of the home appliances such as air conditioners. He then ramped it up with those of steel and aluminum. Next came his battle with China. In this battle, the president has so far imposed tariffs worth more than $260 billion. China has responded with targeted tariffs worth more than $70 billion. Two weeks ago, the two countries agreed on a truce as they negotiate a deal acceptable to both of them. This issue will continue in the coming year as the back and forth between the two countries continue.
On a positive note, the trade negotiations between United States, Canada, and Mexico produced results in the USMCA agreement. This is an agreement that will replace NAFTA. Traders will continue to focus on the negotiations between the US and the European Union.
Brexit was another important topic this year. The UK and the European Union continued to negotiate on a deal that will be acceptable to the respective parliaments. The two countries came to an agreement in November. This deal was ratified by the European Union but faced challenges in the UK House of Commons. This is because the members said that the deal was very friendly to the EU. In the coming year, this will be a closely-watched issue as the UK is expected to leave the EU in March.
Crude oil started the year in a bullish manner. In October, the price reached a three-year high. This was an important milestone for the oil producers and was because of the expectations that a withdrawal of Iran will lead to shortage. To fill the gap, the oil producers opened their taps leading to significantly lower oil prices. The intervention was curtailed by the killing of a Saudi dissident, Jamal Khashoggi by Saudi Arabia.
$1 Trillion Companies
This year marked the first time companies crossed the $1 trillion market valuation. The first company to hit the milestone was Apple. It was then followed by Amazon. However, the third quarter performance and the lowered forward guidance lowered the companies valuation. Amazon and Apple are all valued below $900 billion.
In November, the United States went to the mid-term elections. These were important elections because they changed the composition of congress. Senate republicans increased their numbers. This presents a major risk to the Trump administration in the new year. This is because congress will initiate multiple investigations that will detract his agenda.
This year, Italians elected populist leaders that have gone to war with Brussels. This is because the budget they proposed went far and above the required deficit target. In an extraordinary move, the European Union rejected the proposal. The rise in populism will likely continue in the coming year especially in Europe.
Another big story for the year was the decline in the cryptocurrencies industry. The currencies have lost more than 85% of their value in the biggest sell-off of the year. This happened as investors lost confidence in the industry.