Market Update – January 3, 2017
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.[i] The S&P 500 lost 1.10%, the Dow was down 0.86%, and the NASDAQ gave back 1.46%.[ii] For the first time since November 4, the indexes posted three straight days of losses.[iii] 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.[iv]
By market close on December 30, 2016, all three indexes showed healthy growth for the year:[v]
- 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.[vi] 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.[vii]
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.[viii]
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.
ECONOMIC CALENDAR:
Monday: Markets Closed in Observance of New Year’s Day
Tuesday: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending
Wednesday: ADP Employment Report
Thursday: PMI Services Index, ISM Non-Manufacturing Index
Friday: Employment Situation, International Trade, Factory Orders
| Data as of 12/30/2016 | 1-Week | Since 1/1/16 | 1-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 | -1.10% | 9.54% | 8.50% | 15.60% | 5.79% |
| DOW | -0.86% | 13.42% | 12.26% | 12.35% | 5.86% |
| NASDAQ | -1.46% | 7.50% | 6.26% | 21.33% | 12.29% |
| U.S. Corporate Bond Index | 0.66% | 5.52% | 5.68% | 4.22% | 6.76% |
| International | 0.56% | – 2.43% | -2.12% | 3.62% | -2.03% |
| Data as of 12/30/2016 | 1 mo. | 6 mo. | 1 yr. | 5 yr. | 10 yr. |
| Treasury Yields (CMT) | 0.44% | 0.62% | 0.85% | 1.93% | 2.45% |
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the SPUSCIG. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
Riggs Capital Management, LLC is a branch office of Orchard Securities, LLC. Securities offered through Orchard Securities, LLC, member FINRA/SiPC
[i] https://www.msci.com/end-of-day-data-search
[ii] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1482469200&period2=1483074000&interval=1d&filter=history&frequency=1d
[iii] http://www.cnbc.com/2016/12/30/stocks-open-higher-to-begin-last-trading-session-of-2016.html
[iv] http://money.cnn.com/2016/12/30/investing/dow-stocks-2016-trump/
[v] http://www.cnbc.com/2016/12/30/stocks-open-higher-to-begin-last-trading-session-of-2016.html
[vi] http://www.cnbc.com/2016/12/27/consumer-confidence-for-december-2016.html
[vii] http://www.reuters.com/article/us-global-forex-idUSKBN14J019
[viii] https://www.bloomberg.com/news/articles/2016-12-29/oil-set-for-first-annual-gain-in-3-years-before-opec-supply-cuts