Newsletter: In the Markets – Week-Ending January 15
Crystal Brook Advisors
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United States: Oil futures dropped below the key $30-a-barrel level on Friday, with concerns that Iranian supplies will add to a global surplus setting prices up for a weekly loss of more than 10%. The Dow Jones Industrial Average sank 391 points. West Texas Intermediate crude fell as much as 6.2 percent, before trading 5.4 percent lower at $29.51 a barrel.
Europe: European stocks fell to their lowest level in more than a year as investor concerns about global growth intensified after disappointing U.S. data and the price of oil slide.(1)
Asia: The Shanghai Composite Index fell 3.55% to 2,900.97. The index has fallen 20% from its recent high, the definition of a bear market, reached on December 22.(2) The Hong Kong dollar sank by the most in more than a decade.
• Asian stocks declined, with a regional measure falling to its lowest level in more than four years, as concern about China’s growth outlook continued to fan a global selloff.
• Construction activity in Mexico dropped 1.4 percent in November compared to October, the largest monthly drop since a 2.5 percent decline in May 2015.(3)
• West Texas Intermediate crude tumbled to the lowest since December 2003. Commodity returns fall to lowest since at least 1991 on Oil rout.
• Greece reported a 0.4 percent increase in November after three years of falling prices.
• Brent crude briefly fell through the psychologically important $30-a-barrel barrier on Wednesday, before settling down 2.4 percent for the day, at $30.12.
• Oil price plunge and yuan devaluation drive Dow to fall 365 points, S&P down 2.5% and the NASDAQ down 3.4%.
• The federal government ran a deficit of $14.4 billion in December. Fiscal year to date, U.S. government is $215.5 billion in the red, most since the first three months of fiscal year 2013.(4)
• The Consumer Discretionary Select Sector SPDR (XLY) slumped 3.4%, its worst one-day percentage decline since August 24.(5)
• Energy and health-care shares led a rebound in U.S. stocks, as the Standard & Poor’s 500 Index followed the steepest selloff since September with its strongest gain in a month, and the Dow Jones Industrial Average rallied more than 220 points.(6)
• Canadians stocks tumbled to the lowest in 2 1/2 years as a rally on Thursday proved short-lived amid a rout in energy companies and the longest losing streak in history for the nation’s currency.(7)
U.S. stocks ended the day with sharp losses Friday, posting the worst 10-day calendar start in history. A combination of plunging crude-oil prices CLG6, -4.94% and worries about slowing growth in the U.S. and China unsettled investors. Stocks trimmed their losses in the last hour of trading, but remained sharply lower. The S&P 500 SPX, -2.16% closed 45 points, or 2.3%, lower at 1,876, with financials, information technology and energy leading the losses. The Dow Jones Industrial Average DJIA, -2.39% fell 392 points, or 2.4%, to 15,987. Intel INTC, -9.10% led the Dow industrials lower, down more than 9%. Meanwhile, the Nasdaq Composite COMP, -2.74%ended the day down 127 points, or 2.7%, at 4,488.(8)
Contributor: Felipe Vargas-Zúñiga
(1) Source: Bloomberg
(2) Source: Marketwatch
(3) Source: IHS Global Insight, Bloomberg LP and Wells Fargo Securities, LLC
(4) Source: U.S. Department of the Treasury and Wells Fargo Securities, LLC
(5) Source: Yahoo Finance
(6) Source: Bloomberg
(7) Source: Bloomberg
(8) Source: MarketWatch