On 31 December, 2015 – US and Asian markets declined in 2015; most European markets rose for the year
Markets around the world were closed Friday for New Year.
United States
US stocks ended the final trading day of 2015 on a muted note, with the S&P 500 Index and the Dow Jones Industrial Average snapping multiyear winning streaks. The S&P 500 dropped 0.9%, netting a 0.7% loss for 2015 and snapping a three-year winning streak. The Dow Jones Industrial Average fell 1%, to finish the year down 2.2%, its first annual loss since 2008. Meanwhile, the Nasdaq Composite Index slid 1.2%, but was the only index out of the three to post a gain for the year.
Energy stocks led the gainers on the S&P 500, with shares in Southwestern Energy, Range Resources, Oneok and Williams Cos. Rising. Chimerix also rose after hedge fund billionaire Steven A. Cohen’s investment firm reported that it purchased a 5.3% stake in the biotech group.
On the economic front, weekly jobless claims released early Thursday rose 20,000 to 287,000 in the week ended December 26, marking the largest weekly increase since February. Meanwhile, the Chicago Purchasing Managers’ Index (PMI) plunged to its lowest level since July 2009 at 42.9 in December from 48.7 in November. A reading below 50 indicates a contraction.
Europe
Europe’s benchmark stock index inched lower on Thursday, but closed out 2015 with a fourth straight yearly advance, after 12 months marked by aggressive monetary easing, “Grexit” jitters and fears over a Chinese economic slowdown. The Stoxx Europe 600 index ended 0.5% lower, trimming its 2015 gain to 6.8%. The annual rise marked the index’s fourth consecutive year of advances, the longest winning streak since 2006. Germany’s DAX 30 Index, which closed out the year on Wednesday, scored a 9.6% yearly gain, helped partly by a weak euro. Germany is a major export economy, benefiting from the stronger buying power from foreigners when the euro slides. France’s CAC 40 Index dropped 0.9% on Thursday, trimming its gain for the year to 8.5%. The UK’s FTSE 100 Index lost 0.5% on Thursday, ending the year 4.9% lower, drastically underperforming most of Europe due to its heavy exposure to commodity markets.
Major energy companies were among the decliners in the UK, led by Royal Dutch Shell, BP, and BG Group. Bucking the negative trend, shares in Sports Direct International rose after the retailer said it would start paying its staff above the minimum wage beginning Friday. The announcement comes after criticism over worker conditions at the company earlier this month.
Asia Pacific
A decline in oil prices weighed on energy stocks in the Asia Pacific region on Thursday, with the Australian market retreating from a two-month high. Australia’s S&P ASX 200 finished down 0.5% after nine straight positive days. For the year, it was down 2.1%, its first decline in four years. Australian energy shares, which have lost 31% this year, were down 0.9%. Materials shares were off by 0.7%.
Hong Kong’s Hang Seng Index closed the year down 7.2%, while the Shanghai Composite rose 9.4% for 2015, making it Asia’s best-performing stock market this year — despite a memorable summer crash that rattled global markets. The two markets were up 0.2% and down 0.9%, respectively, on Thursday. Energy shares in Hong Kong were down 1%.
The MSCI Asia Pacific Index also declined 4.4% for the year. Most Southeast Asian markets as well as Taiwanese and Hong Kong equities, all of which felt the pressure from China’s economic slowdown, weighed on the index.
Japan’s market, which is closed Thursday, notched a 9.1% gain for 2015, better than the 7.1% gain registered in 2014, as a weak yen helped Japanese exporters’ earnings.
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.