US stock performance in 2017 points to wealth for many nations

NEW YORK: US markets bid 2017 goodbye on a modestly defensive note on Friday, but the year will be best remembered for leaving global investors wealthier.

A pick-up in global growth boosted corporate profits and commodities during the year, while tame inflation kept central banks from snatching away the punch bowl of easy monetary policy.

MSCI´s world equity index shed 0.12 percent on Friday, leaving it short of an all-time intraday high reached earlier in the session but nonetheless enough to give the index an unparalleled record of gains each month this year.

The large and mid-size companies in the index of 47 countries added more than $8 trillion to their market value during the year.

"By all accounts 2017 has been a great year for the market," said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland.

Craig James, chief economist at fund manager CommSec, said of the 73 bourses the firm tracks globally, all but nine recorded gains in local currency terms this year.

Major indexes from Japan to the United States and emerging markets are up double-digit percentages for the year, with the pan-European FTSEurofirst 300 index up 7 percent. U.S. markets offered caution signs for the new year in the year´s final hours of trading on Friday. Wall Street stocks and the U.S. dollar drooped, helping safe-haven bonds and gold, and a reminder that after a run-up with so few obstacles there may be little room for error.

The Dow Jones Industrial Average fell 118.29 points, or 0.48 percent, to 24,719.22, the S&P 500 lost 13.93 points, or 0.52 percent, to 2,673.61, and the Nasdaq Composite dropped 46.77 points, or 0.67 percent, to 6,903.39.

"The key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines," said CommSec´s James. "Globalization and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are," he said. One of the early issues for 2018 will be the March 4 Italian election. As things currently stand the vote is expected to produce a hung parliament that could ultimately catapult four-times premier Silvio Berlusconi back to center stage.

Ten-year Italian government bond yields rose to two-month highs on Friday at just over 2 percent. Bond prices fall as their yields rise.