Crude Oil Biggest Winner, as USD, Stocks Log Yearly Gainers

Crude Oil Biggest Winner, as USD, Stocks Log Yearly Gainers

Crude Oil Biggest Winner, as USD, Stocks Log Yearly Gainers

$USO, $OIL, $DXY, $DIA, $SPY, $QQQ, $GLD

The USD, Crude Oil and US stocks slipped Friday in thin pre-Holiday trading on the last session of Y 2016, but ended the with big gainers on the year.

  • Russell 2000 +19.5% YTD
  • DJIA +13.4% YTD
  • S&P 500 +9.5% YTD
  • NAS Comp +7.5% YTD

The USD logged its 4th year running of gains Vs a basket of peer currencies, as Crude Oil prices notched up their biggest annual gainer since Y 2009.

Global markets also fared well in a year marked by major political shockers, including June’s vote for Britain to leave the EU, and the unexpected election of Donald Trump as the US President in November.

MSCI’s World Index, which tracks shares in 46 countries, rose 5.6% on the year, its best performance in 3 years. Friday, the index retreated 0.04% as weakness on Wall Street eroded earlier gains in Asia and Europe.

The pan-European STOXX 600 Index ended the session up 0.3%. For the year, the index finished down 1.2%, its 1st annual loss in 5 years.

The US Dollar (.DXY) Index, which measures the Buck against its 6 major peers, gained about 3.7% on the year.

USD rallied hard since the US Presidential election on expectations that President Elect Donald Trump’s plan to boost fiscal stimulus would benefit the US currency. A faster projected pace of rate hikes from the Fed next year also helped the rally.

Crude Oil prices settled little changed Friday but attained their biggest annual gainer in 7 years after OPEC and other major producers agreed to cut output to reduce a global supply overhang that has depressed prices for 2 years.

Brent Crude rose 52% this year, and WTI Crude Oil rose about 45%.

US Treasury debt yields closed lower in a shortened session Friday, falling for a 3rd day running to end a weak Q-4 with a modest consolidation.

The sell-off during Q-4 was due largely to Donald Trump’s election victory, and the expectation of looser fiscal policy and rising interest rates based on his campaign promises of increased infrastructure spending and tax cuts.

The benchmark 10-year T-Notes rose 8/32 in price to yield 2.446%.

Precious metals had a strong year too, with Gold rising 8.5%, snapping a 3 year losing streak. Palladium was the best performer, up more than 21% in Y 2016.

Have a terrific New Year!

 

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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