U.S. markets got off to their worst start ever to a new year. The selling was virtually indiscriminate, with every sector and segment of the market down. Further worries about Chinese growth, the renminbi, and how regulators manage falling asset prices have been ascribed as the chief catalysts.
A strong jobs report for the month of December could not quell the downturn on Friday. Employers added 292,000 new workers during the month, far more than expected.
Safe haven assets performed the strongest on the week. The dollar appreciated against key foreign currencies such as the Yen and Pound while bonds also rose in value. Gold also rose considerably after a poor 2015. Among stocks, utilities were by far the best performers due to their reputation as a bond proxy.
Oil continued its slide, falling over 10% on the week. Concerns over the growth prospects of China and other parts of the world are weighing on the commodity.
Saudi Arabian officials announced that an IPO of Saudi Aramco is under serious consideration and could be decided upon soon. If Aramco went public it would instantly become the largest company in the world.
Insurers of Puerto Rico’s bonds have filed a lawsuit against the government due to its default of approximately $35 million last month. The suit was long-expected. Congress and the White House are still debating the best way to deal with the island’s debts.
Economic data out of Europe was mixed on the week. German trade data showed a smaller trade surplus than expected while inflation readings also were reported to be weak. On the positive, factory orders and PMI levels were strong while Germany also posted better retail sales over the prior month.