Below is a snapshot of 2019 stock market performance around the world.  The table shows the year-to-date percentage change (in local currency) for the major stock markets of 74 countries.

It has been a great year for global equities with the average country up 12.45% year-to-date.  Of the 74 countries, 61 are in the green while just 13 are in the red.

The top performing country in the world in 2019 is Greece with a gain of 48.15%.  Russia ranks 2nd with a gain of 43.24%, followed by Romania (+33.98%), Ireland (+31.17%), and Brazil (+31.1%).

Notably, all of the developed “G7” countries and all of the BRICs rank in the top half this year when it comes to performance.  Italy has been the top G7 country with a gain of 30.27%, but the US is not far behind in 2nd with a gain of 28.61%.

On the downside, Nigeria and Lebanon are the only two countries that fell more than 10%.  Sign up for Bespoke’s “2020” special and get our Bespoke Report 2020 Market Outlook and Investor Toolkit.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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Politics & Policy

Don’t Be Afraid of Political Fragmentation by Pepjin Bergsen (Chatham House)

Many European political systems are seeing their parties splinter into smaller and smaller groups, the opposite of the two-party system in the United States. But the shift can be managed quite effectively so it doesn’t result in gridlock, as exemplified by the Dutch experience. [Link]

Furor over the Fed: Presidential Tweets and Central Bank Independence by Antoine Camous and Dmitry Matveev (Bank of Canada Staff Notes)

In a new paper, researchers argue that while markets have been influenced by the President’s recent efforts to influence monetary policy, the FOMC has not yielded to pressure from the President. [Link; 27 page PDF]

Tech Wreck

The Decade Tech Lost Its Way (NYT)

A compendium of the stories which drove the arc of the technology industry from hero to villain across the last 10 years of growth, scandals, and memes that defined the technology industry. [Link; soft paywall]

Social Media

Facebook Is Still Prioritizing Scale Over Safety by Alex Kantrowitz (BuzzFeed News)

Internal incentives at Facebook direct employees to grow the business, despite concerns that the focus on growth is creating scandals that damage the company longer-term. [Link]

An eight-year-old U.S. YouTuber earned $26 million in 2019 by Trevor Mogg (Digital Trends)

Focused on toys but dabbling in a variety of subjects “Ryan’s World” is a YouTube channel with 23mm followers and 34bn views, earning the family that runs it tens of millions of dollars per year in ad revenues. [Link; auto-playing video]

The Best Things In Life Are Free

How I Eat For Free in NYC Using Python, Automation, Artificial Intelligence, and Instagram by Chris Buetti (Medium)

An inventive bit of code has made it easy to swap social media posts for free meals all over the city, and what’s really impressive is that it’s been entirely automated by its inventor. [Link]

Retailers Gave You Free Returns and You Ruined It by Donald Moore (Bloomberg)

Aggressive consumer behavior around free returns can include ordering numerous sizes, wearing and returning, and other major abuses can lead to blacklists at some online retailers who are tired of the costs. [Link; soft paywall]

Explainers

The WIRED Guide to 5G by Klint Finley (Wired)

Not sure what all this “5G” business means for your phone, your investments, or anything else? Wired has you covered with this helpful rundown on the technology. [Link; soft paywall]

What Trump has done to the courts, explained by Ian Millhiser (Vox)

Thanks to a compliant caucus of Senate Democrats, the President has been appointing huge numbers of federal judges to lifetime appointments at all levels of the judiciary and across the country. What’s especially noteworthy is their very young age, which means they will have a large impact on federal legal interpretation for decades to come. [Link]

Hedge Funds

Renaissance Employees Could Face Clawbacks Over Hedge Fund’s Tax Maneuver by Gregory Zuckerman and Richard Rubin (WSJ)

Employees who invested in RenTech’s hedge funds via their 401(k) or IRA plan without paying fees may be forced to pay large tax penalties to the IRS as a result of the practice. [Link; paywall]

Pigs

Chinese Gangs Use Drones to Spread African Swine Fever by Jordan Schneider (ChanEconTalk)

With state and local governments paying out compensation for herds of pigs impacted by African swine fever, local gangs have sprung up to take advantage of the new market and spread the disease to local herds. [Link]

History

How the West “Invented” Fertility Restriction by Nico Voigtländer and Hans-Joachim Voth (American Economic Review)

A fascinating review of why unusually late marriage ages for European women (a factor that has broadly benefitted European development) may have come about: more animal husbandry, caused by the high impact of the Black Death. [Link; 39 page PDF]

Suburbs

New York City Suburbs Lure Millennials With Luxury Digs, Ax-Throwing Bars by Prashant Gopal and Vildana Hajric (Bloomberg)

With younger people priced out of Manhattan and Brooklyn, two Westchester County cities are developing new buildings and amenities to attract residents fleeing the prices and cramped square footage of the central city. [Link; soft paywall]

Brexit

Violence in Northern Ireland Rising Amid Political Paralysis by Ceylan Yeginsu (NYT)

With the future of the Good Friday Agreement in doubt thanks to Brexit, sectarian and vigilante violence in Northern Ireland is once again on the rise after decades of improvement. [Link; soft paywall]

Crypto

Jilted investors want cryptocurrency boss’ body exhumed by Paulia Froelich (NY Post)

When he died from complications of Crohn’s, crypto entrepreneur Gerald Cotton took with him the passwords for millions of dollars worth of stored coins, prompting investors to demand a confirmation. [Link]

Opioids

Sackler-owned opioid maker pushes overdose treatment abroad by Claire Galofaro and Kristen Gelineau (AP)

The maker of OxyContin is trying to profit from the swelling of the opioid crisis by selling an overdose treatment abroad, benefitting from both the ascent and consequences of the drugs’ catastrophic abuse. [Link]

Labor Markets

Vox Media to cut hundreds of freelance jobs ahead of changes in California gig economy laws by Ari Levy and Alex Sherman (CNBC)

Freelancers working for Vox Media’s SB Nation site will lose their jobs after the passage of a new California law forces employers to reclassify contractors as employees. New full-time employees on a different team will take over the duties next year. [Link]

Goodbyes

Joe Hammond’s final article: ‘I’ve been saying goodbye to my family for two years’ by Joe Hammond (The Guardian)

Two years after being diagnosed with motor neuron disease, UK columnist Joe Hammond says goodbye to his readers and his family in a heartbreaking documentation of his slowly ending life. [Link]

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Have a great weekend!

Recent performance of the S&P 500 has impressed as the index has risen 7 of the last 8 sessions and logged a series of all-time highs along the way. But as shown in the chart below, this solid performance is hardly an outlier relative to history when looking at the performance of the S&P 500 from the close on Thanksgiving Day through year end.  As shown in the chart, this has definitely been a better run than typical but by no means is an outlier relative to history over the last 30 years.  Sign up for Bespoke’s “2020” special and get our Bespoke Report 2020 Market Outlook and Investor Toolkit.

Below is an excerpt from a recent edition of Bespoke’s nightly Institutional note, The Closer.

One of the great complaints about the post-crisis equity market is that it is “propped up” via buybacks.  However, buybacks are just one form of capital return (with dividends the other option).  Firms with operating cash flow have limited options around what to do with it: hold the cash (which almost always has poor returns), reduce debt (which isn’t a very good strategy for most companies when real rates are low), invest in new production (again, a poor strategy in a world of relatively weak final demand growth), return capital (via dividends or buybacks) or, finally, purchase other businesses via M&A.

Given the buyback narrative, it may surprise investors to discover that 10% of S&P 500 assets are goodwill (that is, the asset recorded when a company is purchased above book value). The growth of goodwill represents a relatively aggressive acquisition strategy from major corporate CEOs, and frankly, it makes us somewhat nervous that 10% of all US equity assets (which themselves in aggregate are already being valued at 3.3x book value) are the remainder of acquisitions above and beyond the book value of assets.

Are companies really better-served continuing to accumulate these sorts of assets via acquisitions instead of returning capital to shareholders?  As things currently stand, the 10% number is probably manageable, but we encourage investors to think critically when considering some of the alternatives implied by market memes similar to the complaints about buybacks.  Sign up for Bespoke’s “2020” special and get our Bespoke Report 2020 Market Outlook and Investor Toolkit.