Special Update: 2016 in Review

newsletter-market-update

Looking back on the final trading week of a very eventful year, we saw low volume and a break from the recent rallies for domestic indexes. While international stocks in the MSCI EAFE added 0.56%, all major U.S. indexes declined.[1] The S&P 500 lost 1.10%, the Dow was down 0.86%, and the NASDAQ gave back 1.46%.[2] For the first time since November 4, the indexes posted three straight days of losses.[3] Despite these last-minute decreases, 2016 ended very differently than it began.

Last January, domestic indexes rang in the New Year with quite unpleasant performances. While the S&P 500 and NASDAQ dropped, the Dow experienced its worst-ever five-day start to a year, losing 1079 points on fears of an economic slowdown in China and plummeting oil prices.[4]

By market close on December 30, 2016, all three indexes showed healthy growth for the year:[5]
• S&P 500: Up 9.5%
• Dow: Up 13.4%
• NASDAQ: Up 7.5%

In addition to this equity growth, last week showed us a number of encouraging economic indicators for 2016, including:

Consumer Confidence Surge: On December 27, Consumer Confidence beat expectations to reach 113.7 – a 13-year high.[6] This metric indicates that consumers feel more positively about jobs, personal finances, business conditions, and more.

U.S. Dollar Increase: The dollar was up for the fourth straight year, showing a 3.7% increase for 2016 after hitting a 14-year high on December 20.[7]

Crude Oil Recovery: After a rough start to the year, oil experienced its largest annual increase since 2009. In fact, three-dozen U.S. gas and oil producers in the S&P energy index gained more than 40% during 2016.[8]

We all know that 2016 brought its fair share of surprises – from victories for Brexit and Donald Trump to our recent stock market rally and beyond. However, the year ended with domestic indexes up and a number of positive economic indicators. As we look toward 2017, we see opportunities for continued growth, as well as many questions that no one can yet answer.

• Will President Trump reduce regulation and taxes?
• Will OPEC keep its pledge to lower oil output?
• How will China’s economy perform?
• Could more “Brexits” be on the horizon?

The questions remain, but no matter the answers, we are here to help guide you through the year – and toward your goals – with proactive, strategic support. If you want to talk about what we experienced in 2016, or what we anticipate for the year ahead, we are always here for you.

 

[1] https://www.msci.com/end-of-day-data-search

[2] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1482469200&period2=1483074000&interval=1d&filter=history&frequency=1d 

http://finance.yahoo.com/quote/%5EDJI/history?period1=1482469200&period2=1483074000&interval=1d&filter=history&frequency=1d 

http://finance.yahoo.com/quote/%5EIXIC/history?period1=1482469200&period2=1483074000&interval=1d&filter=history&frequency=1d

[3] http://www.cnbc.com/2016/12/30/stocks-open-higher-to-begin-last-trading-session-of-2016.html

[4] http://money.cnn.com/2016/12/30/investing/dow-stocks-2016-trump/

[5] http://www.cnbc.com/2016/12/30/stocks-open-higher-to-begin-last-trading-session-of-2016.html

[6] http://www.cnbc.com/2016/12/27/consumer-confidence-for-december-2016.html

[7] http://www.reuters.com/article/us-global-forex-idUSKBN14J019

[8] https://www.bloomberg.com/news/articles/2016-12-29/oil-set-for-first-annual-gain-in-3-years-before-opec-supply-cuts