Tahoe Truckee Market Beat: 2015 year in review
U.S. markets posted a relatively flat year in 2015. The S&P 500 was down -0.73% for the year, the Dow was down -2.23%, and the tech heavy NASDAQ had a reasonable gain of +5.73%.
Commodities were also down for the most part, the Gold ETF, GLD closed the year down -10.67% and the crude oil ETF, USO closed down -45.97%.
The best performing sector was Consumer Cyclical with a respectable gain of +8.33%. Health care was the next best sector and it posted a return of +5.34%.
The other sectors in the green last year were Consumer Defensive with a return of +4.34% and Technology which had a gain of +3.58%.
All the other sectors closed the year in the red, led by the Energy sector, which posted a loss of -23.80%. The energy sector was dragged down by the drop in the price of crude oil.
Basic Materials was the next worst performing sector with a drop of -10.62%. Other sectors in the red for the year were Utilities with a return of -8.34%, Industrials, down -6.31%, and Financial Services which fell -3.64%.
Foreign stocks were mixed with some of the developed countries performing fairly well while the emerging markets were down for the most part.
The Pan-European Index, the STOXX 600, finished the year up +6.9%. EFA, the ETF that represents the EAFE (Europe, Asia and the Far East) had a small decline of -1.00%. The emerging markets ETF, the EEM, closed the year down with a -16.18% return.
The Shanghai Index closed the year with a gain of +9.4%. It also gave up most of that gain on the first trading day of the new year.
China’s manufacturing report was worse than expected and the market sold off and triggered their circuit breakers, which resulted in the market ceasing trading down about 7% in one day.
Global stocks followed China’s rout and opened 2016 on a down note. The Dow opened about 350 points lower, and as I write this is, it is on track for the worst opening day of a new year in 84 years, since 1932.
Fourth quarter earnings reporting will get underway on January 11th when Alcoa starts the season off with its final report for 2015. Earnings growth should get going again in the first quarter of 2016.
Kenneth Roberts is a Truckee-based Registered Investment Advisor. Information is at his blog at http://www.sellacalloption.com or 775-657-8065. The mention of securities should not be considered an offer to sell or solicitation to buy investments mentioned. Consult your investment professional to understand the risks and/or how the purchase or sale of these investments may be implemented to meet your investment goals. Past performance is no guarantee of future results.
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