Markets mixed as 2016 comes to a close

Markets were mixed on the last trading day of the year on Friday.

The S&P 500 fell 0.5 percent. Nevertheless, it rose 9.5 percent for 2016 as a whole.

The STOXX Europe 600 rose 0.3 percent on Friday but finished the year down 1.2 percent.

The MSCI Asia Pacific Index rose 0.2 percent for a gain of 2.3 percent in 2016.

“We seem to run into resistance around these levels, which isn’t unusual given the gains we’ve seen recently,” said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group.

Indeed, Bob Pisani at CNBC thinks that investors already “seem wildly optimistic”.

“A genuine boost in consumer spending and even a modest corporate tax cut could have a significant impact on earnings. But the market is already anticipating that,” said Pisani.

Markets mixed but face "train wreck" next year

Markets were mixed on Thursday.

The S&P 500 finished flat amid mixed economic data. Jobless claims fell last week but the trade deficit rose as exports declined in November.

The STOXX Europe 600 fell 0.4 percent, with banks among the biggest losers after a report that the US Securities and Exchange Commission is probing several European banks over a Mozambican bond sale.

In Asia, the Nikkei 225 fell 1.3 percent as Toshiba continued its slide amid concerns about write-downs in its nuclear business. The Shanghai Composite Index fell 0.2 percent.

Michael Farr, president of Farr, Miller & Washington, thinks that the US stock market is building a short-term base. "I think it can provide support for the final year-end surge," he said.

Next year, however, could see a "train wreck", according to Jim Rickards.

Ricards told CNBC that president-elect Donald Trump's economic stimulus plans will not pan out, causing a "head-on collision" between perception and reality.

"Either we're going to have a recession or a stock market correction," he said.

Markets mixed but “animal spirits appear to be reviving”

Markets were mixed on Wednesday

The S&P 500 Index fell 0.8 percent but the STOXX Europe 600 rose 0.3 percent.

Earlier in Asia, the Nikkei 225 was flat, the Shanghai Composite Index fell 0.4 percent but the Hang Seng Index rose 0.8 percent.

“It’s a reminder that markets are up a lot, which leads to investors becoming more selective in their buying habits,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Still, Liz Ann Sonders, Charles Schwab’s chief investment strategist, told Fortune that “animal spirits appear to be reviving” and that she is now overweight US stocks relative to developed international stocks.

Markets edge up to maintain momentum, "no sign" of top

Markets were mostly marginally higher on Tuesday.

The S&P 500 rose 0.2 percent and the STOXX Europe 600 rose 0.1 percent.

Earlier on Tuesday, Asian stocks were mixed, the Nikkei closing flat and the Shanghai Composite Index falling 0.3 percent.

Peter Cardillo, chief market economist at First Standard Financial, said that the "market is on momentum roll" while noting that it has "just slowed down".

That slowdown could make this week critical for stocks next year.

Ari Wald, technical analyst at Oppenheimer, said that following a rally around the year-end, the S&P has gained on average 2.8 percent in the following three-month period.

However, if the market is down during the year-end, the S&P has averaged a 1.2 percent loss in the following three months.

But for now, Wald sees a continuation of the rally. "There's no sign of a meaningful top in place," he said.

Nikkei falls, Shanghai rises as China seen meeting growth target

Most major Western markets were closed on Monday.

In Asia, the Nikkei 225 fell 0.2 percent while the Shanghai Composite Index rose 0.4 percent after being down earlier in the day.

Xinhua said in a commentary on Monday that China will meet its growth target of 6.5 percent to 7 percent growth this year.

However, a government think tank reported on Monday that property curbs introduced this year in China's biggest cities are likely to be kept throughout 2017 even as it noted that the current restrictive measures were "insufficient" and had limited effects.

Stocks seeing slow end to year but could surge in 2017

Markets were flat on Friday.

The S&P 500 rose 0.1 percent while the STOXX Europe 600 was little-changed.

"No one wants to take additional risk between now and the end of the year. They don't want to jeopardize those gains," said Stan Shipley, strategist at Evercore ISI.

Indeed, while many analysts see stocks moving higher in the remaining days of the year, most see gains being limited.

"The psychology seems to be setting up for a little bit of upward movement, not some strong 5 percent move. I think we could see a slow rise over the course of the rest of the year," said Don Townswick, head of equities at Conning.

For 2017 though, Nicholas Vardy, chief investment officer at Global Guru Capital, thinks that the US stock market could surge.

"First, the fog of the earnings recession in the S&P 500 has lifted," he said. "Second, U.S stocks have a strong recent history of outperforming in the first year of a presidency."

Markets fall, but stocks expected to resume rally

Markets fell on Thursday.

The S&P 500 and the STOXX Europe 600 fell 0.2 percent while the Nikkei 225 fell 0.1 percent.

While the US stock market fell for a second consecutive day on Thursday, some analysts remain bullish.

Jack Bouroudjian, CEO of Index Futures Group LLC, thinks that “the rally we have experienced over the last few weeks might be the 'tip of the iceberg' when it comes to the move we will see in the coming years”.

Kate Warne, investment strategist at Edward Jones, said: “We expect stocks to grind higher, but expect pullbacks if things don’t materialize as fast as people are hoping.”

Still, Ron Insana at CNBC thinks that there are risks for the stock market, especially the risk that the economy accelerates and inflation moves above the Federal Reserve's 2 percent target, which could see the central bank “move rates up farther and faster than currently anticipated by the stock market”.

Stocks fall amid "boring" market, value stocks "the place to be"

Markets fell on Wednesday.

The S&P 500 fell 0.25 percent, the STOXX Europe 600 fell 0.21 percent and the Nikkei 225 fell 0.3 percent.

Oil fell, with both Brent and WTI crude falling around 1.5 percent.

"People are taking a pause and they want to see what's going to happen," said Chris Zaccarelli, Chief Investment Officer for Cornerstone Financial Partners.

The result is that stocks haven’t been this boring since 1992.

Kevin Marder thinks that substantial post-election gains suggest a short-term pullback is possible, but in the meantime, value stocks are the place to be at.

Dow hits record as US growth could make stocks “look extraordinarily cheap”

Markets rose on Tuesday.

In the US, the S&P 500 rose 0.4 percent while the Dow Jones Industrial Average and the Nasdaq Composite both rose 0.5 percent to record highs.

Elsewhere, the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 rose 0.5 percent.

US stocks continue to hit record highs amid warnings that the rally could stall, the latest such warning coming from Schaeffer’s Investment Research.

With the Dow and the S&P 500 approaching big round numbers of 20,000 and 2,300 respectively, selling is likely, said Schaeffer’s Todd Salamone.

Salamone also noted optimism coming into the market, “which usually occurs prior to a sell-off or trading range behavior”.

In contrast, Bryan Rich thinks that the stock market rally is “just getting started, and has a long way (higher) to go”.

“If we indeed get growth closer to 4% from pro-growth policies,” he wrote, “the S&P 500, relative to history, will look extraordinarily cheap.”

Markets mixed, stocks may need to consolidate

Markets were mixed on Monday.

The S&P 500 rose 0.2 percent, the STOXX Europe fell 0.1 percent and the Nikkei 225 was flat.

Markets were little-affected by the assassination of the Russian ambassador to Turkey.

However, gold rose 0.5 percent and US 10-year Treasury yields fell 5.7 basis points to 2.54 percent.

Peter Cardillo, chief market economist at First Standard Financial, noted that the market's calm reaction to the assassination of the Russian ambassador showed that there is “very little fear among investors”.

Nevertheless, further gains may be limited in the short-term.

Cardillo thinks that the “stock market reached a point where it needs to consolidate before it can move higher” while Katie Stockton, chief technical strategist at BTIG, sees “a pullback in the weeks ahead”.

Further out, a CNBC survey of 13 strategists' outlooks published since the US election found the median 2017 S&P 500 price target is 2,325, just a little higher than Monday's close of 2262.53.

After flat week, further gains may be difficult for US stocks

The US stock market was flat last week.

After touching an all-time high on Tuesday, the Standard & Poor's 500 failed to make further gains and finished the week down just under 0.1 percent. The Dow Jones Industrial Average managed to gain 0.4 percent.

Further gains may be difficult for the stock market after rallying over 8 percent since the US elections.

“We are putting fuel on the fire here potentially, because nothing has actually happened, everybody is acting like it is already happening,” said Richard Bernstein, chief executive officer of Richard Bernstein Advisors in New York.

Paul Nolte, portfolio manager at Kingsview Asset Management warned that the stronger US dollar and higher interest rates could weigh on corporate earnings. “It's just a matter of when and how,” he said.

Higher bond yields are also making bonds look more attractive than stocks. Greg Peters, Senior Investment Officer at PGIM Fixed Income, thinks there is “a big valuation disconnect” and “that will continue to keep people invested in bonds”.

However, if the economy performs well, stocks could maintain their good run.

“This economy is in good shape in our view,” said Ryan Detrick, senior market strategist at LPL Financial, “and that should be a potential positive for equities”.

Markets mixed but stock rally could run further

Markets were mixed on Friday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.3 percent and the MSCI Asia Pacific Index rose 0.2 percent. As a result, the MSCI World Index finished flat.

Analysts do not see an end yet to the rally though.

“This reflation move is real,” said Paul Christopher, global market strategist at Wells Fargo Investment Institute. “We're not calling the top by the end of this year. It could easily run into January.”

Sam Stovall, chief investment strategist with research firm CFRA, thinks that the market is seeing an early Christmas rally. “There's enough hope and anxious uncertainty that will not be resolved until well into 2017, combined with the desire to avoid paying higher taxes,” said Stovall. “Those factors will keep the market elevated.”

Stocks rise as US homebuilder sentiment surges but looking "rich" relative to bonds

Stocks mostly resumed their rally on Thursday.

The S&P 500 rose 0.4 percent while the STOXX Europe 600 rose 0.9 percent.

Kathleen Brooks, research director at City Index, wrote in a note on Thursday that “animal spirits” unleashed by Trump “have won the day”.

However, stocks were also boosted by strong economic data, in particular, the National Association of Home Builders' housing market index surging to 70 in December, the highest since July 2005, from 63 in November.

“The market can withstand more rate hikes as long as the economic growth is underpinning it,” said Quincy Krosby, a market strategist at Prudential Financial.

However, Jonathan Garber at Business Insider noted that bonds are flashing a warning sign for stocks.

Citing analysis by Societe Generale's Cross Asset Allocation team published in a note on November 18, Garber wrote that stocks are now at a level where they are “rich” relative to bonds.

Fed hikes rates, markets fall, but stocks could yet rally

The Federal Reserve raised interest rates for the first time this year on Wednesday.

The Fed increased the fed funds rate by 25 basis points to a range of 0.5 percent to 0.75 percent after its monetary policy meeting, citing “realized and expected labor market conditions and inflation”.

Fed officials projected three quarter-point rate increases in 2018 based on median federal funds forecasts of 1.375 percent in 2017 and 2.125 percent the following year.

Markets fell, with the MSCI All-Country World Index declining 0.6 percent. The S&P 500 fell 0.8 percent while the STOXX Europe 600 fell 0.5 percent.

The US two-year Treasury note yield rose more than eight basis points to 1.238 percent while the US dollar rose 1.3 percent against the yen.

Oil fell, Brent crude and US crude settling 3.27 percent and 3.66 percent lower respectively.

The Fed's decision was “largely as expected”, Ed Keon, portfolio manager and managing director at QMA, said, but “the market is taking it as a bit more aggressive or hawkish than it had thought”.

Earlier on Wednesday, though, Jim Paulsen, the chief investment strategist at Wells Capital Management, said that stocks may rally longer than even the most bullish predictions despite a Fed rate hike as the latter would be taken as an acknowledgement of the economy's improvement.

Stocks rise amid bullish sentiment as valuations hit highs

Markets rose on Tuesday.

The S&P 500 rose 0.7 percent to an all-time high, the STOXX Europe 600 rose 1.1 percent and the Nikkei 225 rose 0.5 percent.

US Treasuries were steady as the Federal Reserve began its monetary policy meeting while European bonds rose, with the Italian 10-year bond yield in particular falling 12 basis points to 1.87 percent.

The pause in the rise in bond yields may give stock investors some relief. While higher interest rates are usually thought to be bad for stocks, CNBC reported that according to LPL Financial's analysis of history, higher yields should not start affecting stock values until the 10-year note roughly doubles from its current value.

Indeed, Bespoke Investment Group reported on Monday that bets against the US stock market has declined significantly.

"With U.S. equity markets making new all-time highs post-election, sentiment has turned extremely bullish in the options market," wrote Mandy Xu, derivatives strategist at Credit Suisse, in a note on Monday.

However, this bullishness may be misplaced.

The Office of Financial Research reported on Tuesday in the US that stock valuations based on prices to earnings have reached the same high level that they hit before "the three largest equity market declines in the last century".

Investors are now vulnerable to "to heavy losses from even moderate increases in interest rates".

Stock rally pauses but emerging markets looking “attractive”

Markets were mixed on Monday.

The S&P 500 Index fell 0.1 percent but the Dow Jones Industrial Average rose 0.2 percent.

In Europe, the STOXX Europe 600 fell 0.5 percent but the oil and gas sector jumped 2.2 percent.

In Asia, the Nikkei 225 rose 0.8 percent but the Shanghai Composite Index fell 2.5 percent after China Vanke Co.’s president predicted home sales will drop “significantly” in the coming year.

Oil surged, West Texas Intermediate and Brent crude jumping 2.6 and 2.5 percent respectively. However, copper fell 1.5 percent.

Bonds continued to fall, with US 10-year Treasury yields rising as much as six basis points before dipping to end up one basis point at 2.48 percent.

While stock markets paused for a breather from its rally on Monday, Bryan Rich, founder of billionairesportfolio.com and fxtraderprofessional.com, thinks that the stock market rally is “just getting started”.

“The long-term trajectory of stocks still has a large gap to close to restore the lost gains of the past nine-plus years, from the 2007 pre-crisis highs,” he wrote at Forbes. “And from a valuation standpoint, stocks are still quite cheap relative to ultra-low interest rate environments.”

However, some analysts think that the post-election surge in US stocks could end quickly, according to a CNBC report.

“It's clear the market is willing to give President-elect Donald Trump the benefit of the doubt right now,” said Quincy Krosby, market strategist at Prudential Financial. “But if history is any guide, the honeymoon always ends.”

However, if the US stock market rally comes to a halt, there may still be opportunities in emerging markets, according to a Bloomberg report.

A survey conducted by Citigroup showed that 50 percent of respondents think emerging-market economies will re-establish themselves as a “dominant driver of global growth” in 2017, and that could lure global investors back into emerging-market stocks.

“When you take into account the relative valuation of stocks and the relative valuation of the currencies, we do see value,” said Johanna Kyrklund, head of multi-asset investments at Schroder. “When you combine the two it becomes quite attractive.”

Stocks resume rally as BIS notes resilient markets

The rally in stocks resumed last week after pausing the previous week.

The S&P 500 rose 3.1 percent, the STOXX Europe 600 rose 4.7 percent and the MSCI All-Country Asia Pacific Index rose 2.0 percent.

The Bank for International Settlements released its latest quarterly report on Sunday.

In the report, the BIS noted that markets have been "resilient". While global bond yields have risen, stocks have climbed as investors appear to have "priced in faster growth and higher corporate profits in the United States" and corporate credit spreads remained tight.

However, emerging market economies have been less fortunate. The global rise in yields and the strengthening of the US dollar weighed on the assets of emerging market economies, leading to bond outflows and exchange rate depreciation.

Stocks rise but bonds fall as rate hikes look imminent

Markets continued to rally on Friday.

The S&P 500 rose 0.4 percent to another record high while the STOXX Europe 600 rose 1.0 percent.

Earlier on Friday, the Nikkei 225 jumped 1.2 percent while the Shanghai Composite rose 0.5 percent.

Commodities mostly rose. West Texas Intermediate crude rose 1.3 percent but gold fell 0.9 percent.

Government bonds fell. The US 10-year Treasury yield rose six basis points to 2.47 percent.

Bond yields rose as traders in the federal funds market priced in a 100 percent probability of a Federal Reserve rate hike on 14 December.

Adding to pressure on bonds were reports on Friday showing that inflation was picking up around the world.

The Bank of England reported that UK consumers’ inflation expectations jumped to 2.8 percent in November, the highest in more than two years, from 2.2 percent in August.

The National Bureau of Statistics reported that China's producer prices rose 3.3 percent in November from the previous year, the fastest rate of increase in five years.

"China has entered a new inflationary cycle," Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group in Hong Kong, told Bloomberg News. "The next move of the PBOC should be an interest rate hike, not a cut."

Markets rise as ECB extends asset purchases

Markets rose on Thursday.

The S&P 500 rose 0.2 percent to a new record high, the STOXX Europe 600 jumped 1.2 percent and the Nikkei 225 and Shanghai Composite both rose 0.7 percent.

West Texas Intermediate crude jumped 2.2 percent and US 10-year Treasury yields rose seven basis points to 2.41 percent.

The European Central Bank sent mixed signals at its monetary policy meeting on Thursday.

The ECB announced that its asset-buying programme will be extended from March next year to the end of 2017 but at a reduced pace of 60 billion euros from April from the current 80 billion euros.

Despite the reduced pace of buying, ECB President Mario Draghi told a press conference that there "is no question about tapering".

The ECB also added that if "the outlook becomes less favorable or if financial conditions become inconsistent with further progress towards a sustained adjustment of the path of inflation", then it would increase the programme again in terms of size and/or duration.

Markets rise amid strong risk appetite

Markets rose on Wednesday.

The S&P 500 jumped 1.3 percent to an all-time high while the STOXX Europe 600 rose 0.9 percent.

Earlier on Wednesday, Asian stocks also rose. Both the Nikkei 225 and Shanghai Composite Index rose 0.7 percent.

Government bonds also rose on Wednesday. US 10-year Treasury yields fell five basis points to 2.35 percent and Germany's 10-year bond yields fell three basis points to 0.35 percent.

“Appetite for riskier assets is strong amid investors and nothing is stopping them from beefing up their bullish bets,” said Naeem Aslam, chief market analyst in London at Think Markets UK Ltd.

However, oil prices fell. West Texas Intermediate crude fell 2.3 percent amid speculation increased that production by US shale producers will counter output cuts from OPEC.

Markets rise, Dow breaks record again

Markets rose on Tuesday.

The S&P 500 rose 0.3 percent. The Dow Jones Industrial Average rose 0.2 percent to finish at an all-time high for the second consecutive day.

The STOXX Europe 600 rose 1.0 percent as Italy's FTSE MIB surged 4.2 percent.

Earlier in Asia, the Nikkei 225 rose 0.5 percent while the Hang Seng rose 0.8 percent.

The focus is “back to reflation and it’s back to assessing 2017”, said Chris Weston, chief market strategist at IG.

Stocks shrug off Italian political uncertainty, surge may be around the corner

Markets were mostly higher at the start of the week despite political uncertainty in Italy.

Italian Prime Minister Matteo Renzi resigned on Monday after losing a referendum he had called to push through constitutional changes.

Asian markets fell on the news. The Nikkei 225 fell 0.8 percent and the Shanghai Composite tumbled 1.2 percent.

However, European markets closed higher. The STOXX Europe 600 rose 0.6 percent.

In the US, the S&P 500 rose 0.6 percent.

However, Peter Cardillo, chief market economist at First Standard Financial, warned that this was just "the calm before the storm" while Claus Vistesen, chief euro zone economist at Pantheon Macro, wrote in a note: "The economy could easily grind to a halt due to political uncertainty."

Still, some analysts think that the stock market rally has at least a bit more to run.

Jeffrey Saut, the chief investment strategist at Raymond James, wrote on Monday that after a pause last week, the S&P 500 has entered the final surge of a buying climax.

Also on Monday, Todd Gordon of TradingAnalysis.com said on CNBC that another big surge for the small caps is around the corner.

S&P 500 valuation stretched but may be sustainable

The S&P 500 fell 1 percent last week, its first weekly drop sine the US presidential election.

The pause in the US stock market rally last week came as USA Today reported that market valuations have become stretched.

“Since Election Day, the price-to-earnings (P-E) ratio, a common metric used to measure whether stocks are cheap or overvalued, have swelled further to 17.1 times earnings from 16.2 times, which is well above the long-term average of 15.3 over the past 30 years, according to Thomson Reuters,” wrote Adam Shell in the report.

“The market is pricing in great expectations,” says David Kotok, chief investment officer at Cumberland Advisors. “There is little margin for disappointment.”

However, other analysts remain sanguine.

“When there is a quantum shift in growth expectations, the arithmetic of P-E multiples fails to capture the value in stocks,” argues Don Luskin, chief investment officer at TrendMacro.

Jim Paulsen says the stock market’s current valuation is “not excessive” and that “a P-E of about 17 is probably a sustainable multiple for the overall market”.

S&P 500 flat despite positive jobs number

Markets were mostly lower on Friday.

In the US, the S&P 500 was flat but the Dow Jones Industrial Average fell 0.1 percent.

European stocks fell, with the CAC 40 in particular falling 0.7 percent and the FTSE 100 falling 0.3 percent.

In Asia, the Nikkei 225 fell 0.5 percent while the Hang Seng slumped 1.4 percent.

The US employment report on Friday showing an increase of 178,000 jobs in November had little impact on markets. While the headline number was positive, the report also showed fewer people looked for work and hourly wages fell.

Indeed, bond prices rose. The yield on the US 10-year Treasury note fell to 2.39 percent from 2.45 percent on Thursday.

Oil continued to rally. US crude rose 1.2 percent while Brent rose 1 percent.

Markets mixed but oil rises again

Markets were mixed on Thursday.

The Dow Jones Industrial Average rose 0.36 percent to another record high but the S&P 500 fell 0.35 percent.

The STOXX Europe 600 fell 0.3 percent but the MSCI Asia Pacific Index rose 0.6 percent.

Oil rose again on Thursday. Brent crude surged more than 4 percent while West Texas Intermediate jumped 3.3 percent.

Gene McGillian, manager of market research for Tradition Energy, sees WTI crude "reaching the 2016 highs near $52 and even pushing above that" while Goldman Sachs forecast an increase in prices to $55 for WTI and $56.50 for Brent.

Markets mixed, oil surges after deal on output cut

Markets were mixed on Wednesday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 was flat.

Crude oil surged after the Organization of the Petroleum Exporting Countries agreed to cut production levels. West Texas Intermediate crude jumped 9.3 percent while Brent rose 8.8 percent.

Michael Matousek, head trader at US Global Investors Inc., said: “The deal is taking people by surprise, so they’re desperately buying futures now.”

However, Stuart Samuels, a London-based sales trader at Oppenheimer Europe, said that while oil had driven pushed European stocks up on Wednesday, “I’d be inclined to take some profits” with Sunday’s Italian referendum on constitutional reform looming.