In the Markets: Week-Ending December 11
Newsletter: In the Markets – Week-Ending December 11
Crystal Brook Advisors
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United States: Retirement plan participants may pursue a bigger say in which industry they would like their plans to invest. The High-yield bond market is going through a significant change. Private equity is doing well.
Europe: European Union discusses proposals on corporate tax and risk sharing to protect savers. Europe Stocks at 7-Week Low While Glencore Leads Miners’ gain.
Asia: China intensifies crackdowns on corruption. Japan’s ruling coalition is searching for an extra 600 billion yen to provide a lower rate on processed as well as fresh foods when the consumption tax grows to 10% in April 2017.
• European Union members discuss how to close corporate tax loopholes and a proposal of sharing cost of shielding savers in banking crises.
• United States high-yield bonds including interest payments are down 2% this year.(1)
• Oil fell to its lowest level in almost seven years; fell 4% to $41.22 a barrel as the aftershocks from Friday’s OPEC marathon policy meeting reverberated around the market.
• Opposition wins Venezuela presidential elections ending Chavez regime government.
• Some gun control groups who are 401(k) plan participants pressured banks and financial firms to stop funding gun manufacturers.
• China continues to crack down corruption.
• Small businesses remain cautious as optimism in the sector fell to 94.8 in November.
• Private equity firms continue to achieve stellar returns.
• U.S. stocks mark 3rd straight drop as oil takes a turn lower.
• Third Avenue high-yield fund decided to liquidate the fund in face of mounting investor sell orders.
• The federal government incurred a deficit of $64.6 billion in November.(2)
• Value of U.S. household real estate assets finally eclipsed the 2006 record high in Q3 2015, rising to almost $25T.
• Commodity producers climbed for a second day after hitting their lowest levels since 2009.
• Brutal day of run for cover in the US markets. It is all about reducing risk before the Fed meeting, Oil issues that resulted in WTI closing down to $35.36 a barrel and bond credit quality and liquidity. Liquidity squeeze.
• All indexes down for the day. Dow off 309.54 (-1.76) to finish at 12,265.21, NASDAQ off 111.71 (-2.21) to finish at 4933.47, S&P off 39.86 (-1.94) to finish at 2012.37, VIX finishes at 24.39 up 5.05 (+26.11%)
U.S. stocks ended sharply lower on Friday, as a relentless rout in oil prices, which closed at their lowest levels in seven years, weighed on the main benchmarks. Meanwhile, concerns about a junk-bond selloff ahead of a potential interest-rate increase by the Federal Reserve rattled Wall Street. All three main indexes posted their steepest one-day decline since Sept. 28. The S&P 500 energy sector was the worst performer, tumbling 3.88%, followed by the materials sector, down 2,67%. The S&P 500 SPX, -1.94% fell 39.9 points, or 1.94%, to 2,012. The Dow Jones Industrial Average DJIA, -1.76% fell 310.1 points, or 1.77%, to 17,264. The Nasdaq Composite COMP, -2.21% ended the session 111.7 points lower, or 2.21%, at 4,933.(3)
Contributors: Felipe Vargas-Zúñiga, Huiwen Ma
(1) Source: Barclays PLC
(2) Source: U.S. Department of the Treasury, U.S. Department of Commerce and Wells Fargo Securities, LLC
(3) Source: Marketwatch