Crude prices continued to weigh on markets sending global indices down for the day and week.
United States
Stocks retreated Friday, more than offsetting the moderate increases of Thursday’s session. The Dow Jones industrials were down 1.8 percent and 3.3 percent on the week. The S&P dropped 1.9 percent and 3.8 percent. The Nasdaq lost 2.2 percent on the day and 4.1 percent on the week. Concerns about monetary policy also weighed with the Federal Reserve due to hold its highly anticipated meeting on Tuesday and Wednesday. While the Fed is widely expected to announce an increase in interest rates, traders will be looking to the accompanying statement for clues about the outlook for further rate increases.
Another slump in oil prices to seven-year lows Friday sparked a global sell-off in stocks. Investors worried that the continuing drop in the price of oil is a result of weakness in the global economy, especially China and could cut profits further at big energy companies, which have already been decimated this year. West Texas intermediate crude oil for January delivery tumbled $1.14 to end the day $35.62 per barrel, its worst closing level since February of 2009. The price decline came after the International Energy Agency warned the global supply glut would continue into the New Year.
The International Energy Agency on Friday forecast that the oversupply of crude would continue until late next year and demand would weaken — a dynamic that would continue to weigh on prices. Though the drop in the oil price can help consumers and businesses by reducing energy costs, the recent decline has been weighing on stocks as investors worry it is a sign of a weak global economy.
November nominal retail sales were up 0.2 percent in November after inching up by 0.1 percent in October. However, core retail sales, which exclude autos, gasoline and building materials, increased by 0.6 percent after rising by 0.2 percent in October.
Dow Chemical and DuPont gave up gains made earlier in the week after they confirmed their plan to merge into a company with a market capitalization of $130 billion. The company would then split into three parts, one focused on materials, one on agriculture and the last on specialty products. Adobe Systems advanced after reporting earnings per share in its latest quarter that exceeded analysts’ expectations.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$1.50 to US$1,072.50. Copper futures were up 2.1% to US$2.12. WTI spot crude was down US$1.14 to US$35.62.  Dated Brent spot crude was down US$1.80 to US$37.93. The US dollar was up against the Canadian and Australian dollars. However, it declined against the euro, yen, pound and the Swiss franc. The Dollar Index was down 0.45 percent. The yields on both the US Treasury 30 year bond and the 10 year note declined 10 basis points to 2.97 percent and 2.13 percent respectively.
Europe
Stocks tumbled Friday as continued weakness in commodity prices weighed on the markets, and especially the drop in crude oil prices. Crude prices sank after the International Energy Agency warned that the global supply glut would continue into the New Year. Investors also were cautious ahead of December 16’s Federal Reserve announcement. The FTSE was down 2.2 percent, the CAC declined 1.6 percent, the DAX dropped 2.4 percent and the SMI retreated 1.5 percent. The four indices lost 4.6 percent, 3.5 percent, 3.8 percent and 3.4 percent respectively.
Aurubis plunged after it warned that its operating earnings in fiscal 2016 are expected to be considerably lower than the prior year. Deutsche Bank and Commerzbank were lower. Automakers Volkswagen, BMW, Daimler, Renault and Peugeot declined. In Paris, Schneider Electric declined after the company finalized the sale of Juno Lighting to Acuity Brands $385 million. Technip and Total were down.
Crédit Agricole, BNP Paribas and Société Générale closed lower. In London, Old Mutual, which generates most of its revenue from South Africa, sank. South Africa’s rand plunged to record lows against the US dollar after President Jacob Zuma abruptly fired his Finance Minister on the heels of a credit rating downgrade by Fitch. Mining stocks declined thanks to the continuing weakness in commodity prices. Anglo American, BHP Billiton, Glencore and Rio Tinto retreated. Royal Dutch Shell, BG Group, BP and Tullow Oil tumbled.
Asia Pacific
Stocks declined — except in Japan — commodity price weakness continued and investors awaited the Federal Reserve’s rate announcement on December 16. Although a small rate increase is now a near certainty, investors are waiting to see how the financial markets react to the Fed’s action.
The Shanghai Composite was down 0.6 percent (down 2.6 percent for the week) as the yuan hit its lowest level in nearly four and 1/2 years. Media reports that Fosun Group had been unable to reach its founder and chairman of the group since December 10, liquidity concerns and caution ahead of retail sales, industrial output and fixed asset investment data that were due out over the weekend also weighed on investor sentiment. The Hang Seng lost 1.1 percent on the day and 3.5 percent on the week.
However, the Nikkei was up 1.0 percent with sentiment aided by a rebound in US stocks overnight and fresh weakness in the yen. The Nikkei ended the week 1.4 percent lower thanks to losses in the energy sector. Ono Pharmaceutical climbed after a broker upgrade. Astellas Pharma and Takeda Pharmaceutical also advanced. ANA Holdings and Japan Airlines were up on expectations they would benefit from lower oil prices. Nissan Motor gained on reports its French partner Renault is weighing options to resolve a long-running feud with the French government.
Both the S&P/ASX and All Ordinaries retreated 0.2 percent on Friday and 2.4 percent on the week. BHP Billiton dropped while Rio Tinto ended flat and smaller rival Fortescue Metals Group climbed. BC Iron plunged after the company said it would shut its key Pilbara mine due to falling iron ore prices. The four big banks advanced.
The Kospi retreated 0.2 percent and 1.3 percent on the week. The Sensex lost 0.8 percent and 2.3 percent.
Global Stock Markets

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*

Central Bank activities

 
 

December 16

United States

Federal Reserve Monetary Policy Announcement

December 18

Japan

Bank of Japan Monetary Policy Announcement

 
 
 

The following indicators will be released this week…

 

Europe

 
 
 
 

December 14

Eurozone

Industrial Production (October)

December 15

Germany

ZEW Survey (December)

 

UK

Consumer Price Index (November)

 
 

Producer Price Index (November)

December 16

Eurozone

Merchandise Trade Balance (October)

 
 

Harmonized Index of Consumer Prices (November)

 

UK

Labour Market Report (November)

December 17

Germany

Ifo Survey (December)

 

UK

Retail Sales (November)

 
 
 

Asia/Pacific

 
 

December 14

Japan

Tankan Survey (Q4.2015)

December 17

Japan

Merchandise Trade Balance (November)

 
 
 
 
 

Americas

 
 

December 15

Canada

Manufacturing Sales (October)

 

United States

Consumer Price Index (November)

December 16

United States

Housing Starts (November)

 
 

Industrial Production (November)

December 17

United States

Initial Unemployment Claims (week ending prior Saturday)

 
 

Philadelphia Fed Survey (December)

December 18

Canada

Consumer Price Index (November)

 
*Note — all releases are listed in local time.