Market Update: Thursday, December 29, 2016


  • Equities, oil near flat after overseas declines. (10:15am ET) Investors are sifting through claims data and oil inventory reports on what is expected to be another light trading day, following a Wednesday during which stocks could not gain traction, drifting lower throughout the low-volume session. S&P 500 losses were relatively uniform as ten out of eleven sectors dropped between 0.6% and 1.0%; telecom’s outperformance (-0.3%) was the one exception. Overseas, the Nikkei (-1.3%) fell sharply on a stronger yen; moves were muted in the Shanghai Composite (-0.2%) and Hang Seng (+0.2%). Country indexes across Europe are modestly lower, in line with the 0.2% drop on the STOXX Europe 600. Meanwhile, WTI crude oil ($53.94/barrel) is down slightly, COMEX gold (1148/oz.) is up half a percent, and Treasuries are continuing yesterday’s advance, lowering the yield on the 10-year note another two basis points to 2.49%.


  • The small-range streak is over. The S&P 500 dropped 0.8% yesterday, for the worst day of the month and largest drop since October 11. In the process, the six-day streak of intra-day ranges less than 0.5% is over. That was the longest stretch of small ranges since six in a row in December 2014. Still, the S&P 500 hasn’t closed lower by more than 1% for 54 straight days, tying a streak of 54 in a row ending in late June. Should today not close 1% lower, this will be the longest streak since 66 in a row from the summer of 2014.
  • Two days left. The final two trading days of 2016 have arrived. The past two years saw heavy selling these days, with the S&P 500 down 1.5% and 1.7%, respectively. Those are the two largest drops going back 20 years. The past 10 years, the last two days of the year have returned exactly flat at 0.0% with a positive return four out of 10 times. In other words, there doesn’t appear to be much outperformance late in the year recently.




  • Chicago Area PMI (Dec)


  • China: Official Mfg. PMI (Dec)
  • China: Official Non-Mfg. PMI (Dec)


  • China: Caixin Mfg. PMI (Dec)

Important Disclosures

Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

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