2015 Going Down as Bad Market Year
By Laif Meidell, CMT, President of American Wealth Management, and Portfolio Manager of the AdvisorShares Meidell Tactical Advantage ETF (NYSE Arca: MATH) and the AdvisorShares Market Adaptive Unconstrained Income ETF (NASDAQ: MAUI)
Ever since the price of oil became the stock market’s new weather vane, the weekly measurement of oil inventories, which acts like a thermometer of oil demand versus supply, has received a lot more attention. Wednesday’s slightly lower open in U.S. stocks was not a big surprise given falling oil prices in overnight trading and Tuesday’s sharp stock-market gains. Stocks remained in a narrow trading range for the first hour, as investors awaited the Energy Information Administration’s weekly petroleum status report so as not to be caught on the wrong side of the market.
Looking for reason to rally the second-to-last trading day of the year, stock market bulls kicked the ground in frustration, as the weekly petroleum status report showed crude oil inventories gained 2.6 million barrels and gasoline inventories rose by 0.9 million barrels, a sign that supply still exceeds demand. Stocks continued their sideways drift until the final hour of trading, when the thinly traded market broke through technical support levels setting off a cascade of protective sell programs, erasing much of Tuesday’s gains. The Standard & Poor’s 500 declined 0.72 percent and the Nasdaq Composite fell 0.82 percent on Wednesday.
Even with one trading day left in the year, analysts are already sizing up 2015 with article titles like, “The Year Nothing Worked” and, “The Worst Year for Asset Allocation since 1937.” The reviews point out that between stocks, bonds, cash and commodities, there was no one area that outperformed and therefore picked up the slack for other, underperforming asset classes. According to Bianco Research LLC and Bloomberg, prior years where asset allocation was unfruitful included 1931, 1937, 1953 and 2001 (and don’t forget 2008).
Still feeling the boost from slightly higher commodity prices, this week’s best-performing countries were led by those with higher in natural resources. Leading global stock markets this week is Australia, with the MSCI Australia index up 4.24 percent over the past five trading days, followed by MSCI All Colombia Capped index gaining 4.07 percent over the same period.