Market's evolution 26 of December to 30 of December 2016

Market's evolution 26 of December to 30 of December 2016


Ready to face the first session of 2017 we close the year carrying out a global balance. No doubts about that the 2016 has been a year of unexpected events (such as the election of Donald Trump as president of the US or the  Referendum of Brexit in the UK).

In the recent sessions the markets remained stable without significant movements. Among the different events, we highlight the news about the decision of the European Court of Justice on the floor clauses in which it was determined that banks will have to return to customers the sum they received by concept. In the same vein, we have been aware of the evolution of the Banca Monte dei Paschi di Siena after the requirement of the ECB about 9.000 million euros in new capital in contrast to the 5,000 million estimated by the bank and the government of the country. This, along with factors such as China's growth prospects, Trump and the elections in Germany and France, prompted the European Central Bank to announce that market volatility for the current year will be higher.

The closures were generally positive in the annual balance sheet after a week of relative calm. The biggest breakthroughs were the German selective DAX which went a +9,56% up closing at levels of 11.481. The closures in the STOXX50 were flat at levels of 3.290, while the IBEX35 fell by -2% over the course of 2016, ending around the 9.352.

From the North American continent, we highlight the good data on consumer confidence (113 regarding the expectations of 109), a factor that points to expectations of economic improvement which is based on the rise in crude prices, which will favor inflation levels.

By the end of the year, US stocks held those maximum levels reached, peaking a +13,42% in the Dow Jones (now at levels of 19.762) and a +9% in the S&P500 reaching levels of 2,238).

The balance in Asia was settled without significant changes; both the Hang Seng and the Nikkei225 remained flat during the past year after finishing around the 22.000 and 19,114 respectively. As for the prospects presented by the BOJ were not entirely hopeful since he did not deny the risk of deflation in the face of the drop in consumer price levels of -0.4% compared to the -0.3% anticipated. As for China, it is expected to abandon its +6,5% growth target over the next two years in order to avoid asset bubbles.

As for commodity levels, we can say that this has been a good year for all raw materials, especially crude which rebounded a +52% (now trading close to 57 USD/Brent).

As for currency, the biggest loser was the pound due to the negative effect that expectations of exit from the EU had over the expectations for the country leading to EUR/GBP to 0,8518.