Stocks globally were pummeled in the first trading week of 2016. However, in Asia, shares showed signs of stabilizing Friday.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

Despite a blockbuster US jobs report Friday, the S&P had its worst week in more than four years as worries about China cast a shadow over markets. Both the Dow Jones industrials and the Nasdaq lost 1.0 percent on the day while the S&P retreated 1.1 percent. For the week, the Dow shed 6.2 percent, the Nasdaq lost 7.3 percent and the S&P tumbled 6.0 percent. It was the worst start to a year for the S&P on record. US markets initially posted gains on the robust employment report. However, markets dropped in late day action. It was the third day in a row of heavy losses for the indices.

The market had opened higher after data showing U.S. nonfarm payrolls surged in December and the unemployment rate held steady. The December employment situation report showed a 292,000 gain in jobs, exceeding the highest forecasts. The previous two months were revised upward by 50,000 additional jobs. The unemployment rate held at 5 percent, a seven-year low. But that was not enough to keep stocks in positive territory. Oil prices declined and fears of a Chinese slowdown and the global economy spooked investors all week, creating a turbulent start to the trading year.

Gap sank after the apparel retailer reported a larger than expected drop in December same store sales. The Container Store also tumbled a day after the storage products retailer's fourth quarter profit forecast missed estimates. Apple however snapped a three day losing streak and advanced. The largest losses were financials including JPMorgan Chase and Citigroup. Health care stocks slumped, led by drug companies. Energy stocks also declined as the price of oil continued to fall. Exxon Mobil and Tesoro retreated.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$4.50 to US$1,101.85. Copper futures were unchanged at US$2.02. WTI spot crude was down 11 US cents to US$33.16. Dated Brent spot crude was down 20 US cents to US$33.55. The US dollar was up against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the yen. The Dollar Index was up 0.1 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.91 percent while the yield on the 10 year note slipped 3 basis points to 2.12 percent.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

The European markets were up solidly in early trading after the Chinese stock market rebounded from Thursday’s steep decline and early trading halt. The stronger than expected US employment report also contributed to the positive mood among investors. However, those early gains eroded and the European markets ended the session in negative territory. Crude oil prices, which had been up early Friday, reversed as the session wore on and slipped to back near 12-year lows. Investors also cashed in profits after a tumultuous week of trading. The FTSE was down 0.7 percent, the CAC retreated 1.6 percent, the DAX lost 1.3 percent and the SMI tumbled 2.3 percent. On the week, the indices dropped 5.3 percent, 6.5 percent, 8.3 percent and 6.4 percent respectively.

Siemens decreased despite a broker upgrade. Banks including Deutsche Bank, Commerzbank, Société Générale, BNP Paribas and Crédit Agricole finished lower. RWE and E.ON were lower. Technip and Total declined. In London, Tesco climbed after a broker upgrade. Sports Direct International sank — the company is no longer confident of meeting its adjusted underlying EBITDA target, before share scheme costs, of £420 million for the full year. Royal Dutch Shell, BP and Tullow Oil retreated. Credit Suisse declined in Zurich. The lender published its historical financial information, which has been restated to reflect the new divisional reporting structure and management responsibilities announced on October 21, 2015.

Germany's industrial production decreased unexpectedly in November. Output fell a seasonally and working-day-adjusted 0.3 percent on the month. French industrial production declined more than expected largely due to a fall in mining output. Industrial output decreased 0.9 percent from October when it grew 0.7 percent.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

 

Asian stock indices were mixed Friday and showed signs of stabilizing as China's efforts to calm investors showed early signs of success. China's securities regulator suspended the market's new circuit breaker mechanism and the People’s Bank of China guided the yuan a shade higher for the first time in nine days, helping to prop up shares. Oil prices rebounded in Asian trading, the yen weakened and gold gave up gains after hitting a nine week high, reflecting improvement in risk appetite.

The Shanghai Composite rebounded 2.0 percent in volatile trading that saw the index drop as much as 1.9 percent and climb 3.3 percent in early trading. Sentiment was supported by buying from state controlled funds. The Hang Seng gained 0.6 percent. On the week though, the Shanghai Composite tumbled 10.0 percent and the Hang Seng lost 6.7 percent.

The Nikkei was down 0.4 percent amid mounting worries over China's economy to close at its lowest level in over three months. It retreated 7.0 percent on the week. Fast Retailing dropped after the company cut its annual profit outlook. Exporters turned in a mixed performance, with Panasonic and Canon declining while Sony gained. Advantest advanced after denying a Nikkei report that its operating profit in the nine months through December fell 30 percent. Energy explorer Inpex and JX Holdings were down. Japan's Economy Minister Akira Amari reportedly said that continued oil price declines are not good for the world economy, but would help improve Japan's term of trade.

Australian shares extended losses for a sixth straight session after US stocks fell overnight and oil slid to a 12-year low amid turmoil in China's markets. Economic reports were mixed, with retail sales rising 0.4 percent to a record-high level of $24.774 billion in November from a month earlier, while activity in construction activity contracted in December after four months of expansion. Both the S&P/ASX and All Ordinaries were 0.4 percent lower on the day. On the week, the S&P/ASX lost 5.9 percent while the All Ordinaries retreated 5.5 percent. The Kospi was up 0.6 percent Friday but lost 2.2 percent on the week. The Sensex was up 0.3 percent on the day and down 4.5 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.