The Year in Review: 2016 Market Summary

It’s difficult to predict the market over the short term, and 2016 has proven that point. Here are a few things that surprised the markets this year.

Interest rates remain mainly unchanged for the year. In December 2015 the Fed increased interest rates for the first time in 9 years, and indicated plans to raise rates slowly in 2016. Due to concerns about less than robust economic growth, rates have remained at historic lows. Only post-election have interest rate sensitive sectors moved in  response to anticipated rate increases in 2017. Late year rising bond yields during the quarter resulted in outright declines in bond-proxy sectors, such as utilities, staples, and real estate.

In 2015 the China stock market declined, setting off global market declines and a return to volatility, but by late year that was all behind  us – or so we thought.  2016 started with another steep sell-off in the Chinese stock market which in turn caused global markets to sell off.

World markets also tumbled after the United Kingdom voted to leave the European Union. Investors lost more than the equivalent of 2 trillion United States dollars on June 24, 2016, making this day the worst single day drop in history according to data from S&P Global. The losses were extended to a combined total of the equivalent of 3 trillion dollars by additional selling on June 27, 2016, also according to data from S&P Global. Fortunately, that sell-off was short lived, and within a few days US investors surmised the Brexit was more of a political challenge for the UK, and not a global economic challenge. 

In spite of less than robust economic growth the broad market indices ended the year higher, with the Dow up 13.5%, and S&P 500 up just under 10% for the year, thanks to a post-election rally. Before the presidential election, Wall Street dreaded Donald Trump as a dangerous,  unpredictable and disruptive, if improbable, president. Since his victory, fear has 
turned to hope. Stock markets are at record highs and shares in financial institutions
have been among the best performers. 
 
With the Republicans taking control of the White House and Congress on election night, fossil fuel stocks have since outperformed the S&P 500 (even before the  bullish OPEC production cut announced Nov. 30th); renewables and yield related holdings have underperformed; and Health Care Facilities & Medicaid levered  Managed Care have also underperformed. Additionally, infrastructure stocks and Aerospace & Defense stocks have outperformed.
 
Hopes are that with the incoming administration, the U.S. economy might be able to break out of our unimpressive but steady economic growth. While the range of likely stock market outcomes seems wider under a Trump presidency, you must keep in mind the market is not immune to systemic shocks, nor the natural fluctuations of the business or credit cycles.
/ Print
Posted by Lineweaver Financial Group in 1st Quarter, Newsletter, Market Review, 2016 Market, Market Update

Comments


Be the first to comment
Name*
E-mail*
Website
Comment*
1 Pending Comments
 Keep me updated of follow-up comments!
Most Recent

By Lineweaver Financial Group
November 09, 2017 Category • Introducing, Kids, Grand Kids, Investing, Lineweaver

Introducing Kids (and Grandkids!) to Investing Setting the stage As your kids learn more about managing their money, introduce the concept of investing. Its a great way to reinforce the ideas of goal setting, saving, and budgeting. It can help put them on a long-term path to financial independence. Keep it simple When kids are in elementary or middle school, its a good idea to teach kids to put money away in three buckets: save, spend and share. As they get a little older, say into high school, you can get a little more sophisticated in how you approach investing. Start by explaining that investing is a means of using your money to try to create more money. This usually starts to make more sense for kids when they start to work and they can finally realize how hard they have to work to pay for something, especially after Uncle Sam takes his fair share. Make it real You can start your investing conversation by having a family meeting. You should explain that your intention is to

By Lineweaver Financial Group
November 03, 2017 Category • Tax, Tax Cuts And Job Act, Tax Law

We know that many people are curious about the tax bill announced in the House of Representatives yesterday, H.R.1: The Tax Cut and Jobs Act. Weve put together a balanced review of the bill, and wanted to share it in a timely way. The proposed bill: Condenses individual tax rates to Zero, 12%, 25%, 35%, and 39.6%. Increases the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. Establishes a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses. Preserves the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support. Preserves the Earned Income Tax Credit to provide tax relief for low-income individuals and families. Streamlines

By Lineweaver Financial Group
October 26, 2017 Category • Market Commentary, Market Review, Third Quarter, 2017

Click below to join President and Founder Jim Lineweaver for his 3rd quarter market commentary. If you have questions about your portfolio, were here to help. You can contact us at 216.520.1711, email us atQuarterback@Lineweaver.net, or simply click here.

Categories
Newsletter (25)Retirement Planning (14)Retirement (10)Financial Planning (10)Tax (7)Letter From The President (7)Market Commentary (7)Lineweaver (7)Education Programs (6)Economic Commentary (6)General (5)Tax Planning (4)Q3 (3)Social Security (3)2017 (3)Healthwatch (3)LFG (3)Brexit Update (2)2016 (2)Diversification (2)Market (2)High Income (2)Market Review (2)Bonds (2)Tax Scams (2)IRA (2)Social Security Benefits (2)Financial Strategies (2)Interest Rates (2)Kids (1)Self Employed (1)Grand Kids (1)Retiring (1)Introducing (1)Tax Law (1) (1)Legacy (1)Tax Cuts And Job Act (1)Retire (1)Winter 2017 (1)Market Update (1)2016 Market (1)Client Spotlight (1)Q1 2017 Newsletter (1)Business Owners (1)Investing (1)Retire Early (1)Real Estate (1)Policy (1)1st Quarter (1)Trump (1)FInance (1)Charity (1)Private Foundation Charitable Lead Trust (1)Donor Advised Fund (1)Growing Your Wealth (1)Bonds Ladder (1)Stocks (1)401(k) (1)Rising Interest Rates (1)Charitable Remainder Trust (1)Annuity (1)Annuities (1)Dividend (1)Life Insurance (1)Annuity Alternatives (1)REITs (1)Third Quarter (1)Service Day (1)Estate Planning (1)Women And Money (1)Harvest For Hunger (1)Gifting (1)2017 Q4 (1)Mark Sipos (1)Equifax (1)Charitable Contributions (1)Social Security Planning (1)Retirement Tips (1)Statements (1)Roth (1)Mutual Funds (1)Expense (1)Financial Advisor (1)Financial Advice (1)Costs (1)Insurance (1)Risk Management (1)Candidates (1)Election (1)Identity Theft (1)Politics (1)Fall 2016 (1)Stockpile (1)Holiday Planning (1)Financial Health (1)Fraud (1)Taxes (1)Finance (1)Financial (1)Protection (1)Coordination (1)North Korea (1)Lineweaver Wealth Advisors (1)Conflict (1)Holiday Gifts (1) + Show More