The first half of 2019 was so good for Trade and IPO. Here is what we expect for the next half
These Days marks the beginning of the third quarter and the second half of the year. Broadly, it has been a successful first half of the year as global indices have all risen significantly. In the US, Europe, and Asia, all the major indices rose by more than 10%. The best performer was the Nasdaq index, which rose by 22%.
The best stock market among the developed world was Russia, where the benchmark index rose by 28%. Gold and Bitcoin have risen by 11% and 110% respectively. This article will look the biggest market stories in the first half of the year and how they will impact the second half.
→ Tips to improve your Gold Trading strategies
The Federal Reserve’s sudden movement from being hawkish to being dovish was the main reason why stocks rallied. In the December meeting, the FOMC sounded hawkish and pointed to two more rate hikes this year. This led to a sharp decline of the global stocks. Realizing their mistake, the members started changing tune to become more dovish.
They ruled out the planned rate hikes for the year and in the May meeting, the members signaled a rate cut this year. This will be the first rate cut in more than ten years.
The year started well for the market as the US and China embarked on negotiations on trade. This was the second time under the Trump administration to talk with the Chinese. After missing the March deadline, the US extended the deadline. This changed in April, when Donald Trump restarted the trade war by placing tariffs on Chinese goods worth more than $200 billion. China retaliated by placing additional tariffs on Chinese goods worth more than $60 billion.
The half year ended with the two countries reaching a new truce.
→ Trade War: where we are and where we are headed
The game of chicken at the UK parliament continued this year. The UK was originally scheduled to leave the European Union in March. However, the members of parliament failed to pass the deal that was negotiated by Theresa May. The members also failed to agree on anything, leading to the resignation of Theresa May.
She will now be replaced by either Jeremy Hunt or Boris Johnson, who have vowed to leave the EU at the October 31st deadline. This means that in the half of the year, there could be significant political uncertainty in the UK.
Mergers and Acquisitions
The first half of the year was rife with significant M&A activity. The total value of deals announced through the first half of the year increased by 15% from the final half of 2018 to more than $2 trillion. It was 12% lower than the deals announced in the first half of the year.
42% of these deals were the so-called mega mergers, which are deals above $10 billion. Healthcare deals were the biggest. Examples of these were the Bristol-Myers Squibb acquisition of Celgene for $74 billion, the Abbvie acquisition of Allergan for $74 billion, and the Pfizer acquisition of Array BioPharma for $11 billion.
Other major M&A deals were the Salesforce acquisition of Tableau, Anardako acquisition by Occidental, and the Caesars acquisition.
Initial Public Offerings
It was a strong year for IPOs in the technology sector. The half saw the IPO of large companies like Uber, Lyft, and Zoom video. In total, 467 companies went public, with most of them in the US. While Uber and Lyft IPO disappointed, those of smaller companies did very well. Beyond Meat rose by more than 500%. Other successful IPOs were Zoom Video, PagerDuty, Crowdstrike, and Slack.
In the second half of the year, we expect IPOs from companies like AirBnB.
It was a relatively strong first half year for the cryptocurrencies market. This is after all the major cryptocurrencies increased significantly. Bitcoin has gained by more than 100% while Litecoin has gained by more than 300%. The climb was partly because of the enthusiasm that was in the industry as large companies joined the party.
Facebook unveiled its Libra coin while JP Morgan unveiled its JPM Coin.
→ 3 keys outcomes we expected from libra
Other Big Movers
Other big movers in the first half of the year were the tensions in the Middle East as US and Iran battle for influence. Last Monday, OPEC members had met at Vienna for their half year meeting. Gold rose to a six-year high as the dollar index dropped in the final weeks of the period.
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First half review: More Useful resources
The second half could be a ‘grind’ – CNBC
Stocks post best 1st half since 1997 – UsaToday
Marketwatch – Winner and Loser of 1st half