On 18 December, 2015 – Asian stocks declined after the Bank of Japan surprised but disappointed

 Global growth worries returned sending share indices lower but most advanced for the week.

United States

Stocks plunged across all sectors in the heaviest trading of the year as enthusiasm over a long awaited increase in U.S. interest rates faded. Several other negative factors combined to give the market its second big loss in a row and sending the indices lower for the week. The Dow Jones industrials dropped 2.1 percent Friday and 0.8 percent for the week. The S&P was down 1.8 percent on the day and 0.3 percent on the week. The Nasdaq lost 1.6 percent and 0.2 percent. Trading was even more volatile than usual because of the simultaneous expiration of several kinds of futures and other contracts that investors use to place bets on indices and individual stocks. As a result Friday was the busiest trading day of the year for stocks.

Stocks rallied over the first three days of the week, jumping Wednesday after the Federal Reserve raised interest rates for the first time in almost a decade. The move was a vote of confidence in the US economy. But over the next two days investors were reminded of some of the worries that have dogged them all year — weakness in the Chinese economy, slowing global growth and skidding prices for energy and metals.

Goldman Sachs, ETrade Financial and Citigroup declined. Tech stocks also slumped. Apple was down — its stock has fallen 10 percent so far in December. Microsoft also was down. Transportation stocks fell. J.B. Hunt Transportation and Ryder System were down. Used car dealership chain CarMax disclosed disappointing quarterly results with both its profit and sales falling short of analyst projections. However, Darden Restaurants, the owner of Olive Garden and other chains, climbed after the company raised its outlook for the year. Olive Garden sales rose and the company’s profits were better than expected.

Transocean and Diamond Offshore Drilling slid. Statoil ASA canceled the lease for a Transocean ultra-deepwater rig because there wasn’t enough work for it. Offshore rig owners are suffering from a glut of new vessels entering the market at the same time as falling crude prices force oil explorers to cut spending. Boeing dropped after analysts warned that cheap oil and rising interest rates could clip near term aircraft sales and hamper the strong cash generation that has drawn investors to the stock. BlackBerry gained after boosting software revenue and saying it will likely pull its struggling handset unit into profitability within the next two quarters.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$13.10 to US$1,062.50. Copper futures were up 3.4 percent to US$2.11. WTI spot crude was down 22 US cents to US$34.73.  Dated Brent spot crude was down 18 US cents to US$34.73. The US dollar was down against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index slipped 0.05 percent. The yield on US Treasury 30 year bond was down 1 basis point to 2.91% while the yield on the 10 year note slipped 3 basis points to 2.20 percent.

Europe

The European markets declined as investors locked in profits following Thursday's rally. Markets in Europe were solidly higher yesterday in reaction to the Federal Reserve’s interest rate increase. However, global markets were under pressure. On a light day for economic news, investors remain focused on tumbling crude oil prices. The FTSE was down 0.8 percent, The CAC declined 1.1 percent, the DAX dropped 1.2 percent and the SMI lost 0.5 percent. However, the four indices were up on the week. Both the FTSE and CAC gained 1.7 percent, the DAX added 2.6 percent and the SMI was 1.3 percent higher. A triple expiration of futures, index and stocks options also contributed to the dip on the index.

Daimler, BMW and Volkswagen were lower. E.ON and RWE retreated. In London, GlaxoSmithKline was down after its ViiV Healthcare agreed to acquire Bristol-Myers Squibb's pipeline of investigational HIV medicines. Carnival increased after its fourth quarter profit exceeded expectations. Anglo American and BHP Billiton gained.

Microprocessor designer ARM Holdings was down thanks to profit and outlook warnings from chip designers such as Imagination Tech and Dialog Semiconductor. Analysts cited concerns surrounding potential weakness in shipment volumes of Apple's iPhones next year. ARM Holdings' technology powers Apple's iPhone. Oil stocks declined on a weakening oil prices — BG Group and BP retreated. Anglo American, BHP Billiton, Rio Tinto and Antofagasta were all up. They advanced after metals prices gained following a decline in the US dollar making dollar priced metals cheaper for holders of other currencies.

Asia Pacific

Most Asian stocks were down Friday after US stocks declined overnight and fresh signs of a crude oil inventory buildup put further downward pressure on the already low prices. While positive home price data from China spurred some buying interest, the recovery quickly petered out following the Bank of Japan's policy decision.

The Shanghai Composite was virtually unchanged after home prices rose 0.9 percent in November, up from the previous month's reading of 0.1 percent, signaling further stabilization in the country's housing markets. The Hang Seng was down 0.5 percent. On the week, the former was up 4.2 percent and the latter added 1.4 percent.

The Nikkei ended a volatile session down 1.9 percent after the Bank of Japan tweaked its bond buying program. While keeping its main target for monetary stimulus unchanged at an annual pace of about ¥80 trillion, the BoJ expanded the quantitative easing program to include exchange traded funds. The Nikkei had climbed as much as 2.7 percent before reversing direction. Canon, Panasonic, Fanuc, Honda Motor and Sony were down as the yen seesawed before rising against major currencies in a knee-jerk reaction to the monetary policy announcement.

Both the S&P/ASX and All Ordinaries were up 0.1 percent Friday. Both added 1.5 percent on the week. Commonwealth and Westpac advanced. BHP Billiton and Rio Tinto retreated after the Goldman Sachs Group slashed iron ore forecasts. Newcrest Mining and Evolution Mining tumbled after gold prices declined the most in five months yesterday.

The Kospi slipped 0.1 percent but was up 1.4 percent on the week. The Sensex dropped 1.1 percent but managed to add 1.9 percent on the week.

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.