NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

GLOBAL MARKETS-Stocks slip, close year mixed; oil ends ugly 2015 with slight gain

Published 01/01/2016, 08:33 am
Updated 01/01/2016, 08:40 am
© Reuters.  GLOBAL MARKETS-Stocks slip, close year mixed; oil ends ugly 2015 with slight gain
EUR/USD
-
XAU/USD
-
US500
-
DJI
-
STOXX50
-
JP225
-
GS
-
GC
-
HG
-
LCO
-
CL
-
IXIC
-
DE10YT=RR
-
US2YT=X
-
US10YT=X
-
MSCIEF
-
MIAPJ0000PUS
-
MIWD00000PUS
-
DXY
-

(New throughout, updates prices and market activity to close of trading, adds comments, details on metals, bond indexes)

* US stocks end slightly lower in 2015; Europe mostly higher

* Crude oil down 30 pct in 2015, seen hitting $20

* Commodity currencies among year's worst performers

* Most major asset classes weaken in 2015

By David Gaffen

NEW YORK, Dec 31 (Reuters) - Stock and bond markets in major economies closed 2015 with a mixed performance, while oil prices and emerging markets cemented big losses during a year that provided few safe places for investors.

While equity markets in Japan and Western Europe gained strongly amid ongoing ultra-easy monetary policy, concerns about global growth and a robust U.S. dollar crushed petroleum prices and took down emerging markets, copper and other metals.

Fixed-income posted a middling performance, as riskier high-yield securities fell, largely due to exposure to weakened energy credits. Short-dated U.S. Treasury yields rose.

The MSCI All-World Index .MIWD00000PUS was down 0.7 percent, and closed the year with a loss of 4.2 percent.

For Wall Street's most widely followed average, the Standard & Poor's 500 Index, it was down to the last day of trading to determine whether the year would end negative or not. The benchmark index lost nearly 1 percent for the day, giving its price a 0.7 percent loss for 2015. Including dividends, it posted a positive total return for a seventh straight year.

The market's ups and downs this year were triggered by worries about oil, global growth and the Federal Reserve. The uncertainty surrounding the U.S. central bank's plans dominated the last several months of trading, and some were glad to see it finally begin raising rates.

"I think that now that the Fed finally did something it will calm the intraday jitters a bit at least for the first six months, and hopefully see investors more committed to positions rather than nervous to hold anything," said J.J. Kinahan, chief strategist at TD Ameritrade.

The Dow Jones industrial average .DJI fell 1 percent to 17,425.03, the S&P 500 .SPX lost 0.94 percent to 2,043.92 and the Nasdaq Composite .IXIC fell 1.15 percent to 5,007.41.

Brent crude LCOc1 gained 3.1 percent to $37.60 on Thursday, after a 3.5 percent drop in the previous session. For the year, Brent slid 34 percent after shedding 48 percent the previous year, and a global supply glut shows no sign of abating. U.S. crude lost 30 percent in 2015, after falling 47 percent in 2014. O/R

Some analysts like Goldman Sachs (N:GS) say prices as low as $20 per barrel might be necessary to push enough production out of business and allow the market to rebalance.

Europe's Eurostoxx 50 index .STOXX50 ended the year with gains of 3.5 percent, after losing a bit of ground Thursday.

In Asia, Tokyo's Nikkei index, which was closed on Thursday, finished the year up around 9 percent .N225 . Other Asian markets have been hit by worries about China, the world's second largest economy, and by oil prices near 11-year lows.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up slightly on Thursday but shed nearly 12 percent this year. Broader emerging market stocks .MSCIEF lost 17 percent in 2015.

The outperformance in European and Japanese equities has a lot to do with a strengthening dollar, which has weakened their currencies over the last few years and made their exports more competitive.

The euro EUR= was down 0.6 percent on Thursday, and fell 10 percent against the dollar in 2015. Against a basket of major currencies in 2016 .DXY , the greenback gained 9 percent, with a rebounding jobs market convincing the Federal Reserve to 'lift off' on interest rates earlier this month.

"The Fed could come back with a second hike in March, which is not fully priced in, and the dollar should draw fresh support from that," said Richard Franulovich, senior currency strategist at Westpac in New York.

Currency strategists predict the dollar will add another 4 percent next year. urn:newsml:reuters.com:*:nL3N13R25E

The dollar was particularly strong in 2015 against commodity currencies: It hit a more than one-year high against Russia's rouble RUB= on Thursday, and its highest in at least 13 years against the Norwegian crown NOK= the previous day.

In debt markets, the U.S. 10-year Treasury yield US10YT=RR was at 2.275 percent; it rose modestly in 2015 from 2.17 percent at the beginning of the year.

Much of the year's rise in yields was in short-dated securities on expectations of higher rates from the U.S. Federal Reserve. The two-year yield US2YT=RR rose to 1.05 percent, compared with 0.68 percent at the beginning of the year.

German bonds ended their most volatile year since 2011 with yields higher than they were at the end of 2014, showing the limitations of ultra-easy monetary policy with global disinflationary forces at work.

Ten-year yields DE10YT=TWEB closed at 0.63 percent on Wednesday, up 9 bps on the year and far from record lows of 0.05 percent touched in mid-April.

High yield debt was the worst performer among fixed income in 2015. The Bank of America-Merrill Lynch U.S. High Yield index fell more than 4.6 percent for the year; its U.S. Treasury index gained about 0.65 percent.

Metals were broadly weaker in 2015. Copper futures CMCU3 lost 25 percent on the year, while spot gold XAU= fell 10.5 percent.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Year-to-Date Returns

http://link.reuters.com/syf98v 2015 asset performance

http://tmsnrt.rs/1Ml1UzG Emerging market currencies in 2015

http://link.reuters.com/jus35t Bonds in 2015

http://link.reuters.com/var26w METALS-Base metals slump, face another storm in 2016

urn:newsml:reuters.com:*:nL3N14K23O UPDATE 8-Oil ends 2015 down 35 pct; long, painful hangover seen

O/R US STOCKS-S&P 500 poised for uninspiring end to turbulent 2015

.N

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.