Here’s our news story on the dire state of the US labor market:

It includes a sobering example of the impact of the pandemic on people’s lives:

Fernando Comas of Secaucus, New Jersey, worked as a video engineer in the entertainment industry before the pandemic and has been furloughed since March until at least 2021.

Six weeks ago, his benefits were exhausted. He has been unable to receive answers from his state unemployment agency to try to resolve the issue.

“I have a family to feed, a mortgage to pay, a car payment, and I’m a single father of two small girls who rely on me to provide for them,” said Comas, who cannot afford to find other work because his family’s health coverage is still being covered by his employer. “I’m going to lose everything, probably going to be evicted and will start to go to the food banks for food for my family.”

2020 has been a most dramatic year in the markets - with the worst slump in decades followed by a strong recovery as economies began to recover from the pandemic.

Just before Christmas I asked Tom Stevenson, investment director for personal investing at Fidelity International, what lessons we could take from this year. Here’s his advice:

1. Markets and economies are not the same. Stock markets look through current crises to the future. This is why shares have risen so quickly even as the medical and economic news has continued to be negative.
   
   
2. Although timing the market is never easy, and can be risky, buying opportunities like that in March come along rarely and successful investors need to grit their teeth and have the courage of their convictions at moments like these. Even the underperforming UK market has risen by more than 25% since the low point.
   
   
3. Sometimes the obvious trade is the right one. Backing pandemic winners like technology, working from home stocks and home delivery and avoiding stocks in travel, hospitality and retail was not a complicated decision and the opportunity persisted for quite some time after it was identified.
   
   
4. The need to be flexible. The November rally marked a shift in sentiment away from defensive growth towards the cyclical shares that would thrive in a rapid economic recovery. The discovery of a viable vaccine was always likely to trigger this rotation.
   
   
5. Keep some dry powder in the form of some cash in your portfolio. Without it, the opportunities like the one in March cannot be taken.
   

Dozens of the UK’s best-known newspapers, including The Scotsman and The Yorkshire Post, have been bought by David Montgomery’s National World for just £10.2m in the latest round of consolidation of the ailing local newspaper market.

JPI Media, which owns 100 local newspapers across the country including the Edinburgh Evening News, Lancashire Post, Sheffield Star and Sunderland Echo, has reached a deal with National World, and will take control on 2nd January.

Montgomery, the former chief executive of the parent of the Daily Mirror, has been aiming to strike a takeover deal since launching National World as a publishing consolidation vehicle on the London stock market in 2019.

“JPI ‘s historic publishing brands represent the best in journalism and have reliably served their communities and supported local businesses, in some cases for centuries, and never more than in the last year,” said Montgomery.

“National World will uphold this tradition and implement modern technology to grow the business across a wider footprint based on high quality, unique content.”

JPI Media, formerly known as Johnston Press, has been seeking a buyer since late 2018 when it put itself up for sale to try and pay debts of £220m. JPI rejected all the offers made for its assets - including one from rival publisher Newsquest valuing the business at up to £120m, with no pension deficit obligation - instead choosing to enter administration.

A day later JPI agreed a rescue and restructuring plan tabled by its biggest lenders that involved writing-off £135m of debt, leaving it with £85m of debt.

In November 2019, JPI agreed a £50m deal to sell crown jewel the i newspaper to Daily Mail and General Trust, the owner of the Daily Mail, Mail on Sunday and Metro.

In October, JPI Media sold its printing plants, at Portsmouth, Dinnington and Carn, to DMGT.

Last year, Publicly-listed Reach, which owns national and regional newspaper titles including the Daily Mirror, Daily Express and Manchester Evening News, offered £50m to buy JPI Media but subsequently pulled out of the deal.

Earlier this year, Norwich-based Archant, which publishes more than 50 local titles including the Eastern Daily Press and Ham & High, sold a majority stake to private investment firm Rcapital in a bid to shore up its finances.

In 2012, DMGT sold its local newspaper operations to Montgomery’s Local World, a joint venture comprising more than 100 regional titles, which was valued at £100m at the time. Three years later Reach, owner of the Mirror and Express titles as well as local titles including the Birmingham Mail and Manchester Evening News, took over Local World in a £220m deal.

The decline in the regional newspaper industry has been precipitous. In 2005, Johnston Press - now JPI Media - paid £160m to buy the Scotsman newspaper group from the Telegraph’s owners, the Barclay Brothers. During the administration process in 2018 the titles were assigned a value of just £4.3m by creditors acting for Johnston Press.

The UK’s Footsie index has certainly underperformed against other big stock market indices this year, while the technology-focused Nasdaq has raced ahead.

• FTSE 100: down 14.3% in 2020
• Germany’s DAX: up 3.5%*
• French CAC: down 7.1% (updated)
• Japan’s Nikkei: up 16%
• China’s CSI 300: up 27%
• US S&P 500: up 15.5% (with one day to go)
• US Nasdaq: up 43.4% (with one day to go).

[* the DAX is a ‘total return’ index, so included reinvested dividends]

It’s official, 2020 was the worst year for the FTSE 100 share index since 2008.

The UK stock market has closed for the year, with the blue-chip index down 95.3 points today at 6460 points (a drop of 1.45% today).

That takes its total losses for 2020 to 14.34%, its biggest annual decline since the year of the financial crisis.

Although the Footsie has recovered from its slump in March (when it was down over 30% for the year), it is still a long way from the start of January.

In 2020, the UK stock market was hit particularly hard by the Covid-19 pandemic, with Brexit concerns also weighing on the market.

With Germany’s stock market back in positive territory, and the US at record highs, Britain’s stock market has been a clear laggard (as shown in previous post).

Joshua Mahony, senior market analyst at IG, says

The FTSE 100 closed out the year on the back foot, with the value and cyclical nature of the UK markets ensuring significant underperformance compared with their US counterparts. That underperformance of UK stocks is never more apparent than seeing the Dow reach record highs in the same week as the FTSE 100 could secure its worst annual performance since 2008.

Travel and housing are at the forefront of todays losses, with worries over an extended period of economic restrictions heightening the clear uncertainty of exactly how hard the UK economy will suffer on its exit from the EU. The government’s Brexit deal does allay many of the fears over a potential breakdown at the border, yet questions remain over how hard the services sector will suffer from a deal which pays little attention to an area which makes up a whopping 80% of the UK economy.

With 2020 behind us, traders will be looking forward to a period of increasing stability and prosperity. Despite ongoing upheaval and suffering, the swift actions taken on a governmental and central bank level have helped avoid what could have been a year filled with bankruptcies and economic collapse. Instead, UK businesses are looking towards Spring as a target to blossom once again. The current April deadline to end the furlough scheme coincides with Matt Hancock’s prediction that the UK could be out of this crisis by spring, with the vaccine roll-out boosted by the news that the AstraZeneca inoculation effort begins next week.

While short-term fears over the Covid restrictions and Brexit implications will understandably ensure volatility over the months to come, the prospect of a reopening effort in Q2 should provide the basis for a much better 2021 for UK stocks.

China’s stock market rallied today, after new economic data showed that its factory sector kept growing this month.

The official manufacturing Purchasing Manager’s Index (PMI) came in at 51.9 in December, down slightly on November’s 52.1 (which was a three-year high). Any reading over 50 indicates growth.

The non-manufacturing PMI, which tracks the services and construction sectors, dipped to 55.7, below November’s reading of 56.4, but still comfortable in expansion territory.

The National Bureau of Statistics, which produces the data, said Chinese economic activity remained strong in December despite the declines in both manufacturing and non-manufacturing sentiment.

Zhao Qinghe, a senior statistician at NBS, said:

“The pace of recovery in the manufacturing sector accelerated in the fourth quarter. Although the December manufacturing PMI dropped slightly, it was still only 0.2 percentage points lower than the year’s high in November. The overall manufacturing sector maintained a steady recovery, with the pace at a relatively high level for the year.”

China’s CSI 300 index jumped by 1.9% today, taking its gains for the year to 27%.

London’s stock market has got its New Year hangover in early.

The FTSE 100 has dropped by 101 points in early trading to 6454 points, its lowest level since 23rd December. Most stocks are in the red, as the market wraps up a tough year on a low note.

Airline group IAG is the top faller, down 3%.

Major exporters are also losing ground, due to the strength of the pound, including drinks firm Diageo (-2.9%), chemicals group Johnson Matthey (-2.8%), and medical equipment manufacturer Smith & Nephew (-2.5%).

Property groups British Land (-2.7%) and Land Securities (-2.7%) are also in the fallers, along with oil giant Royal Dutch Shell.

While UK shares are struggling this morning, the pound has hit its highest level against the US dollar since the beginning of May 2018.

Sterling is up a third of a cent at $1.366, as investors continue to ditch the dollar in favour of riskier assets.

Jeffrey Halley, senior market analyst at OANDA, reckons the UK’s decision to approve the Oxford/AstraZeneca Covid-19 vaccine is boosting optimism about 2021.

That, and the prospect of more stimulus measures in the US next year, is dampening demand for the dollar.

Halley writes:

Even the A-Team’s “Hannibal” Smith would be impressed at how well the financial markets buy everything, sell the US Dollar plan is coming together as the year ends. US 10-year yields eased slightly overnight, equities are moving higher, along with precious metals, commodities and energy, and currency markets spent the overnight session clubbing the greenback harder than a harp seal harvest.

Although the US Dollar has been grinding lower throughout the week, it is interesting that currency markets have waited until the year’s penultimate trading session to press the accelerator. Part of that is probably down to the UK approval of the Astra Zeneca/Oxford University Covid-19 for immediate use. The Astra Zeneca vaccine is a potential game-changing accelerator in the Covid-19 battle, being producible rapidly in massive amounts, and storable at room temperatures, instead of environments that mimic the South Pole in the middle of winter.

Against the euro, the pound is up 0.3% at €1.111 - its highest level since Monday.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

We’ve nearly made it. Today’s the final trading session of 2020, ending a year dominated by the Covid-19 pandemic.

And after a highly volatile year, Britain’s FTSE 100 share index is on track for its worst year since the financial crisis 12 years ago, and the worst performance of any of the big share indices.

The FTSE 100 has made a bad start this morning too, sliding by over 1% at the open (more on that shortly).

The Footsie blue-chip index has shed 14% of its value this year, having struggled to recover the brutal losses suffered during the wild crash of February and March when the virus forced Europe into lockdowns.

That’s significantly worse than rival indices. Germany’s DAX, for example, managed a 3.5% rise during 2020.

Other international markets had a much stronger year too, notably in Asia where Japan’s Nikkei has gained 16%, and China’s CSI 300 has jumped by 27% since the start of the 2020.

America’s market has sizzled too, with the S&P 500 up 15% for 2020, and the tech-heavy Nasdaq up over 40% -- due to the surge in mega-cap technology stocks.

Overall, stock markets roared back from their spring slump, thanks to the unprecedented stimulus packages from governments and central banks.

The FTSE 100 has suffered from several factors. It lacks major tech companies, and is instead dominated by financial firms and energy companies, along with some defensive-yet-unexciting consumer goods makers and utilities.

The strength of the pound (which has just hit a 31-month high against the US dollar) has also hit major exporters.

Plus Brexit uncertainty, and the economic damage suffered during the pandemic this year, have also dampened demand for UK stocks, with travel, leisure, and retail all have a rotten 12 months.

Russ Mould of AJ Bell has dubbed 2020 a ‘game of two halves’, writing earlier this month that:

“The UK was a turgid performer, weighed down by its sector mix and heavy exposure to banks and oils and limited exposure to technology, as well as Brexit and perceptions (fair or unfair) that the pandemic has not been handled that well.

In fact the UK was the worst performer in the second half of the year when Latin America, the Middle East/Africa and Asia were the best.

“This switch toward emerging markets again hints at investors looking for cyclical growth – value for want of a better turn of phrase – rather than secular growth – or more reliable, almost defensive progress – as well as global export and inflation plays.

We’ll be tracking the action on the final day of the year, and looking ahead to 2021.

The agenda

• 12.30pm GMT: London stock exchange closes early
• 1.30pm GMT: US weekly jobless claims