Market Recap for 4th Jan 2016 – Whoops! We haven’t seen THIS in 15 years…

By Markus Heitkoetter

Stocks got off to a rocky start in 2016, losing more than 1.5%. With the first day of 2016 behind us, stocks are off to their worst start of the year in 15 years (since 2001).

Today’s move lower was triggered mostly by geopolitical concerns.

After weak Chinese manufacturing data, a sell-off triggered a trading halt in China. The concerns snowballed, leading global markets significantly lower in overnight trading.

With a gap down to start the U.S. session, stocks continued to march lower throughout the morning. If there was positive news from today’s session, it’s that things could have been a lot worse. After finding support, the major indices rallied into the close and erased a portion of the losses from earlier in the day.

Here’s where the indices ended the first trading day of 2016:

The S&P closed 1.5% lower. Down 31 points, the S&P ended at 2012.66.

The DOW finished with a 1.6%. Down 276 points, the DOW closed at 17148.94.

The NASDAQ ended 2.1% lower. With a 104 point drop, the NASDAQ ended at 4903.09.

The NASDAQ had the best performance in 2015 but was the index hit hardest on the first trading day of 2016. Today’s close of 4903.09 is the lowest close for the NASDAQ going back to October.

According to Bloomberg, today’s start erased $289 billion in market value and was the 6th-worst since for the S&P since 1927.

The Middle East was a hot topic today after a Shiite cleric was executed by the Saudi government. The execution upset Iran, and the Saudi embassy in Tehran was stormed by protestors. In response, Saudi Arabia (the world’s biggest oil exporter) cut diplomatic ties with Iran.

The initial reaction to the Middle East news sent Crude Oil (CL) higher by over 3%. But by the end of the open outcry session Crude Oil was trading at $36.79 with a 0.7% loss on the day.

Looking at stocks, Amazon (AMZN) was hit hard today with a 5.8% loss. The drop came after an analyst downgraded AMZN from Buy to Neutral. The analyst confirmed the company strength, but shared concerns over a buy rating while the stock is trading at all-time highs.

We have a pretty active economic calendar this week, but tomorrow is the quietest day of the week with no major reports.

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