Financial Markets and Economy
When the S&P 500 Is Unchanged One Year, What Happens the Next? (WSJ)
The S&P 500 notched some wild swings in 2015, but it appears poised to end the year pretty much where it started. Don’t count on a repeat in 2016.
Whichever way the index goes in the next few hours, the benchmark index is going to chalk up one of the smallest full-year moves in its history. Four times in its history, it’s closed a year out changed by 1% or less, and in 1978, it barely exceed that threshold, closing up 1.06%. In 1947 it closed absolutely unchanged. It last had this narrow a close in 2011, when it lost -0.002%.
This was about as good a buy signal as it got in the stock market in 2015 (Business Insider)
Six years into the current bull market, one of the biggest concerns we've heard repeatedly is that valuations are looking rich.
Here Are the Best- and Worst-Performing Assets of 2015 (Bloomberg)
From currencies to corporate bonds.
Stock futures little changed on last trading day of 2015 (Bloomberg)
U.S. stock index futures were little changed in subdued trading on the last day of the year, with the S&P 500 holding on to a small gain for the year.
Global stocks were heading toward a sluggish end to the year, with the fall in oil prices hurting currencies of commodity-rich countries. The dollar index rose marginally against a basket of currencies.
Currency Funds See Worst Year Since 2011 as Divergence Flounders (Bloomberg)
Currency managers wont be leading late-night celebrations after foreign-exchange funds suffered their worst year since 2011 as bets on monetary-policy divergence disappointed.
Biggest Investors Say Beware the Bond Market as Fed Tightens (Yahoo! Finance)
Bond returns will probably be ho-hum next year — just as they have been in 2015 — according to the biggest investors.
JPMorgan Chase & Co., Fidelity Investments, Pacific Investment Management Co. and Goldman Sachs Group Inc. are all cautioning investors not to be too optimistic. Goldman Sachs predicts benchmark U.S. 10-year yields will climb to 3 percent by the end of 2016 from 2.30 percent Wednesday.
What Markets Say About 2016 (Bloomberg View)
What will 2016 bring for the world economy? Financial markets are sending a mixed message: There's reason to believe that the U.S. will outperform other major developed nations, but also to be wary about the health of American companies.
With the U.S. Federal Reserve and other central banks still holding interest rates low to stimulate growth, one big question is which economies will expand fast enough to justify an increase. As of Wednesday, traders in futures markets were putting their money on the U.S.: They expected the three-month dollar deposit rate to reach 1.24 percent by December 2016, a gain of about 0.64 percentage point. That exceeds their forecasts for the euro area, the U.K. and Japan.
Apple Pressured by Investor for Racial Diversity in Senior Ranks (Bloomberg)
Apple Inc. shareholders could make history next year by deciding whether the company should be forced to increase the number of non-white executives and directors, with a vote on a proposal the iPhone maker has tried to squelch.
Palm Oil Set for Best Year Since 2010 as El Nino Threatens Crop (Bloomberg)
Palm oil headed for the biggest annual gain in five years as the strongest El Nino in almost two decades parches crops in Southeast Asia and trims record stockpiles of the commodity used in food and biofuel.
What the Dow industrials need to gain today to break even in 2015 (Market Watch)
Wall Street will be ushering out the old later Thursday. But whether the Dow industrials rings in 2016 roughly flat return or whimpers out with a loss all hangs on today’s action.
So with stock-index futures pointing lower … and suggesting that the markets are unlikely to rally Thursday, here’s what the Dow needs to do break even.
Capital Economics Forecasts Wild Ride for Iron Ore as $20s Loom (Bloomberg)
Iron ore may be in for a roller-coaster ride next year as prices swoon into the $20s, then rally to end higher after three annual losses, according to Capital Economics Ltd.
The ore may initially drop as low-cost supplies rise further, helping the top producers to expand market share, according to Caroline Bain, the forecaster’s London-based senior commodities economist, who correctly predicted in June that prices would sink into the $30s this half.
S&P 500 Futures Little Changed as Volatile 2015 Draws to a Close (Bloomberg)
U.S. stock-index futures were little changed, with the Standard & Poor’s 500 Index barely hanging on to its fourth consecutive annual gain.
Pound Volatility Surges as Biggest Trader Sees `Brexit' Discount (Bloomberg)
Anticipated price swings in the pound versus the dollar surged to the highest level since the U.K. general election in May, with the world’s largest currency trader saying investors should brace for more.
S&P 500 fights to keep hold of longest winning streak since 2007 (Market Watch)
A fourth straight year of gains was on the line for the S&P 500 on Thursday, as oil prices wobbled and investors counted down the remaining hours in a difficult year.
Stock futures seesawed between small gains and losses, tracking action for oil prices. Dow Jones Industrial Average YMH6, -0.24% futures fell 13 points to 17,495 and S&P 500 ESH6, -0.26% slipped 1.85 points to 2,052.75. Nasdaq 100 futures NQH6, -0.22% dropped 6 points to 4,638.25.
Battered Yuan Posts Worst Year Since 1994 as HSBC Preaches Calm (Bloomberg)
Theres no need to panic, says the yuans top forecaster, even as the currency posts the biggest annual loss in more than two decades and a majority of economists expect further declines next year.
Russia Ends 2015 With Weekly Oil Production Setting a Record (Bloomberg)
Russias oil output is poised to reach apost-Soviet record of 10.86 million barrels a day this week as the nations producers continue to withstand the slump in prices, according to Energy Ministry data.
Power Plant Spinoff Sees EON Say Farewell to Coal Plants: Q&A (Bloomberg)
Germany’s EON SE will officially part with its fossil fuel past tomorrow, when a new company called Uniper is created. Here’s what you should know about the spinoff.
7 ways mutual funds and ETFs will challenge investors in 2016 (Market Watch)
You don’t need tarot cards, a crystal ball, the entrails of animals, a rooster pecking at grains, tea leaves, or coffee grounds to tell the future of the mutual fund business. You just need to look at trends underlying the industry.
So while I honestly expect to see all of the following predictions come true in 2016, I think that at least five will set the tone for how investors view mutual funds and exchange-traded funds a year from now.
Biggest Investors Say Beware the Bond Market as Fed Tightens (Bloomberg)
Bond returns will probably be ho-hum next year — just as they have been in 2015 — according to the biggest investors.
Politics
Watching Trump From the Cheap Seats (The Atlantic)
Listening to Donald Trump speak is like walking into an ongoing conversation. It doesn’t matter where in his speech you start; it feels like he’s already in the middle of a thought on polls or the size of the crowd or some lowlife reporter, and he has just decided to open his mouth and let you in on it. At his Nashua, New Hampshire, rally on December 28, no one introduced him. He just sauntered onstage to Twisted Sister’s “We’re Not Gonna Take It”—the anthem of high school seniors everywhere—and grinned as the crowd chanted his name.
Indiana Lawmaker Introduces ‘Pay To Pee’ Bill For Transgender People (Think Progress)
If Indiana hopes to overcome its reputation for being an anti-LGBT state, 2016 is not shaping up to be a productive year. The state’s top conservative groups are suing to overturn the “fix” tacked onto last spring’s “religious freedom” bill in the hope it will allow them to discriminate against LGBT people in cities where that is prohibited. A Republican-proposed so-called LGBT nondiscrimination bill has so many religious exemptions it wouldn’t actually be enforceable. And now a new bill would actually criminalize transgender people for using the restroom.
Technology
Exclusive: Microsoft to warn email users of suspected hacking by governments? (Reuters)
Microsoft Corp said on Wednesday it will begin warning users of its consumer services including Outlook.com email when the company suspects that a government has been trying to hack into their accounts.
The policy change comes nine days after Reuters asked the company why it had decided not tell victims of a hacking campaign, discovered in 2011, that had targeted international leaders of China's Tibetan and Uighur minorities in particular.
Health and Life Sciences
The one thing you need to know before you detox (Science-Based Medicine)
… There’s Dr. Oz, Gwyneth, and even your favourite Kardashian has advice: They’re all telling you how it’s essential to “detox”, “cleanse” and “flush” away all of your toxins. Your local pharmacy has an ever-growing section of products promising a newer, more pure you: Supplements, homeopathy, ear candles, and an entire aisle of “detox kits” all promise to suck toxins out of your body. Don’t forget your local naturopath who sells IV vitamin drips as the detoxification solution to your problems. The approaches may differ but all the advocates are completely convinced of one fact: Detoxing will deliver a renewed body and better health. Not only will you look better, you’ll feel better. It is a new year. Wouldn’t a purification from last year’s habits (dietary and otherwise) of last year be the best way to start? Well before you pull out your credit card, there is one fact that “detox” advocates are reluctant to tell you.
Early Exercise Helps Gut Bacteria Give Health Benefits (Forbes)
The benefits of exercise are ultimately down to the way it remodels our metabolism. Physical activity also shapes the microbes in the gut, a community whose composition is more malleable during early human development. Physiologists now believe that exercising in early life creates a microbial community that helps metabolic activity in later years.
Life on the Home Planet
When One Journey Ends, Another Begins for Migrants to Europe (Wall Street Journal)
Over two days this fall, 13,000 people arrived in Germany seeking asylum. The Wall Street Journal followed migrants from Syria, Afghanistan and Eritrea as they began their long, uncertain path to residency. They are among a million new arrivals over the past year who are testing Germany’s generosity.
Brussels Cancels New Year's Eve Festivities Over Terror Threat (Bloomberg)
Brussels canceled its New Year’s Eve fireworks display and other festivities because of a “significant” risk of a terrorist attack as authorities detained a 10th person suspected of being involved in the Paris massacre last month.
