Annual 2016 Market Overview
December 31, 2016
During 2016, the US stock market posted its best performance since 2013 after shaking off a horrific start of the year that concluded with the DJIA dropping to a two-year low of 15,660 on February 11th. The index of 30 Blue chip stocks would ultimately end the year plus 26% from that low watermark and closed the year with an annual gain of 13.42%.
Reversing course from the previous year the energy sector was the biggest gainer of the S&P 500 advancing 27.36 % during 2016 after experiencing 2 years of declines. Financial stocks
(+ 22.80%) also performed very well particularly in the latter part of the year benefiting from the prospect of less regulation coupled with a more aggressive plot of higher interest rates going forward after the Federal Reserve finally raised rates in December, for only the second time in the last 9 years.
The Russell 2000 was up 19.48% in 2016, far outpacing gains for the Dow and S&P 500, trading on the thesis that its components are more focused on the US economy, which at the moment, looks more promising than companies operating abroad.
Equity Markets 4th Quarter
The small cap Russell 2000 was the best performing equity asset class in the 4th Qtr. with a return of 8.43%. The DJIA was a close
second at 7.94%. The NASDAQ lagged with a return of just over 1.34% as the S&P Value Index clearly outperformed the S&P Growth Index by a notable 9.17% during 2016.