The Week In Review

12/28-12/31/15

The stock market ended its last session of the year under broad-based selling pressure, which pushed the S&P 500 (-0.9%) into negative territory for the year (-0.7%). This represented the first year-to-date loss for the benchmark index since 2008. The benchmark index outperformed the Nasdaq (-1.2%) today as the technology sector paced today's retreat. On the year though, the Nasdaq outperformed with a year-to-date return of 5.7%. Unsurprisingly, it was a quiet end to the year with fewer than 740 million shares changing hands at the NYSE floor.

The major averages slipped at the beginning of their day as pressure in oil helped to dampen futures trading. Oil prices fell through pre-market trading, but they eventually rebounded to their overnight levels. Oil rallied during the afternoon before settling near the $37.13/bbl price level with a 1.5% gain.

In sectors, energy (+0.3%), industrials (-0.7%), materials (-0.8%), and financials (-0.9%)  lead, while technology (-1.4%), utilities (-1.1%), and consumer staples (-1.1%) rounded out the leaderboard. It is interesting to note, that only two cyclical sectors posted gains in 2015. The top-weighted technology sector gained 4.3% while the consumer discretionary space (-1.0%) rallied 8.4%. On the other side, energy ended the year down 23.6% while materials surrendered 10.0%. Both sectors responded to year-long weakness in commodities, which was highlighted by a 32.2% plunge in crude oil.

Looking at the energy space, Dow component Chevron (CVX 89.96, -0.13) struggled to keep pace with the broader sector while pipeline companies outperformed. Kinder Morgan (KMI 14.92, +0.38) advanced 2.6% following the developments in oil. To be fair though, pipeline companies also benefited from the strong performance of natural gas, which spiked 6.0% to $2.34/MMbtu following a bullish inventory reading.

In the heavily-weighted technology sector, large-cap constituents Apple (AAPL 105.26, -2.06), Alphabet (GOOGL 778.01, -12.29), and Facebook (FB 104.66, -1.56) saw increased pressure as the three underperformed the broader sector with performances 1.9%, 1.6%, and 1.5% respectively. For the year Apple lost 4.6% while Alphabet soared 46.6% and Facebook surged 33.8%.

Treasuries ended their abbreviated session on their highs with the 10-yr yield slipping three basis points to 2.27%.

The stock market will be closed tomorrow in observation of New Years Day.

It was a relatively quiet day on the economic front with data being limited to Chicago PMI and Initial and Continuing Claims:

The Chicago Purchasing Managers Index fell to 42.9 (Briefing.com consensus 50.1) from November's 48.7.

Initial claims increased by 20,000 in the week ending December 26 to 287,000 (Briefing.com consensus 270,000).

No special factors influenced this jump which pushed the four week average up 4,500 to 272,500.

Continuing claims for the week ending December 19th increased by 3,000 to 2.198 million (Briefing.com consensus 2.213 million)

This moved the four week average higher by 9,250 to 2.220 million.

Monday's data will be limited to the 10:00 ET release of November Construction spending report (Briefing.com consensus 0.8%) and the December ISM Index (Briefing.com consensus 49.0).

Nasdaq  +5.7% YTD

S&P 500 -0.7% YTD

Dow Jones -2.2% YTD

Russell 2000 -5.9% YTD

Week in Review: 2015 Ends on Shaky Note

The stock market began the abbreviated trading week on a lower note with the S&P 500 surrendering 0.2%; however, Monday's participation left a lot to be desired considering fewer than 600 million shares changed hands at the NYSE floor. Equity indices stumbled out of the gate with the energy sector (-1.8%) leading the opening slide. The growth-sensitive sector responded to a nightlong retreat in crude oil, which settled lower by 3.3% at $36.86/bbl. The energy component saw additional selling pressure after China reported its sixth consecutive monthly decline in industrial profits (-1.4% in November). The disappointing data from China cast a pall on the overall risk sentiment and a 2.6% decline in the Shanghai Composite certainly did not help matters. Interestingly, the index held its ground through the first half of the session, but plunged in afternoon trade. The situation was a bit different in the U.S. as stocks stumbled out of the gate, spending the afternoon in a slow rally off late-morning lows. Two sectors—consumer discretionary (+0.3%) and utilities (+0.2%)—eked out slim gains while the remaining eight groups registered losses.

Equities enjoyed a broad-based rally on Tuesday, which lifted the S&P 500 (+1.1%) back into positive territory for the year (+1.0%). The benchmark index was outperformed by the Nasdaq (+1.3%) for the bulk of the day, as technology would lead the advance. Once again it was a very quiet day with fewer than 573 million shares changing hands at the NYSE floor. Equity indices spiked out of the gate following a jump in oil prices heading into the opening hour. This led to a large initial uptick in commodity-sensitive sectors like energy (+0.7%) and materials (+0.9%). Their rally was short-lived, however, as the struggling sectors couldn't hold the lead. On a related note, WTI crude was able to end its day near its high, climbing 2.8% to $37.86/bbl.

The major indices ended Wednesday on a negative note after the market faced substantial selling pressure into the close with all the key averages settling near their lows. Despite the retreat, the S&P 500 (-0.7%) was able to stay in positive territory for the year (+0.2%). The benchmark index outperformed the tech-heavy Nasdaq (-0.8%), which narrowed its 2015 advance to 7.0%. Equity indices slipped into the open after overnight selling pressure in oil drove the commodity below the $37.00/bbl price level. This price action came after the American Petroleum Institute reported that crude stockpiles rose by 2.9 million barrels versus a decrease of 3.6 million barrels last week. An hour after the open, the Energy Information Administration disclosed a build of 2.629 million barrels on their weekly crude inventory report versus an expected draw of 2.457 million barrels. The commodity fell 2.9% on the day, ending at $36.80/bbl. Accordingly, the commodity-sensitive energy (-1.5%) and materials (-1.0%) sectors posted the largest losses while utilities (-0.2%), consumer staples (-0.4%), healthcare (-0.5%), industrials (-0.8%), technology (-0.8%), consumer discretionary (-0.8%), and financials (-0.8%) outperformed.