Week In Review: Bitcoin Soars; U.S. Indices End 2016 Higher
Investing.com | Jan 02, 2017 07:09AM ET
by Eli Wright
Last week, as with every post-Christmas holiday week, was all about low volume, quiet trading. Sell-offs predominated, but Bitcoin experienced a wave of upward momentum that moved the crypto-currency higher. That momentum appears to have continued into this week—Bitcoin is up an additional 2.57% as of this writing.
Contrary to US and many global market stocks, a few big Japanese companies trading on the Nikkei saw more volatility than usual.
Here’s how last week played out:
h3 Markets ended the year with a whimper, but U.S. Indices gained/h3
On Friday, the final trading day of 2016, the Dow closed down 0.29%, at 19,762—still shy of the much ballyhooed 20K benchmark; the S&P 500 fell 0.046%, to 2,238.83; and the NASDAQ ended 0.9% lower, at 5,383.12.
Despite the year-end declines, 2016 was a positive year for the major indices. Propelled in no small part by the post-election Trump Rally, the Dow was up 13.42% in 2016; the S&P gained 9.5%; and the NASDAQ wrapped up the year with a net increase of 7.5%.
h3 Bitcoin grabs headlines/h3Bitcoin jumped 13% over the course of last week, as FX traders in India and China among other countries, sought to counter weakness and/or political problems by avoiding their local currencies, hedging instead with something they deemed safer. Over the course of 2016, Bitcoin gained more than 120%. It opened the year at $429.98 and closed at $996.66.
As of this writing, the virtual currency is up more than 2.5% in the first trading session of 2017 – and it's broken through the $1,000 threshold, currently trading at $1,026.54. Many analysts think that Bitcoin could soon push upward to its all-time high of $1,216, reached back in 2013.
h3 Last Week’s Biggest Gainers/h3The S&P had a down week, losing 1.07%. Indeed, all S&P sectors were negative – except for one: Real Estate, which gained 1.20%.
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Source: Fidelity.com
Not surprising then, that among the top ten weekly gainers were six REITs: Macerich (NYSE:MAC), Ventas (NYSE:VTR), United Dominion (NYSE:UDR), Mid-America Apartment Communities (NYSE:MAA), Extra Space Storage (NYSE:EXR), and Equity Residential (NYSE:EQR). Two additional REITs, Public Storage (NYSE:PSA) and Welltower (NYSE:HCN), fell just outside the top ten.
The Energy Index fell 1.25% overall, but Cabot Oil & Gas (NYSE:COG) gained approximately 2.5% on the week.
S&P 500 Materials fell 1.25% last week; nevertheless CF Industries (NYSE:CF) was a top-ten gainer last week, up 2.51%.
Newmont (NYSE:NEM)—the world’s second-largest gold miner, and the only one included in the S&P 500—saw a weekly gain of 4.96%, most likely helped by gold's own up-move, to %1,152.
The Health Care Index dropped 0.85%, with pharmaceutical companies falling a collective 0.21%. Nevertheless, the S&P’s biggest weekly gainer was a Big Pharma company – Allergan (NYSE:AGN), which rose 5.49%.
h3 Last Week’s Biggest Losers/h3Three semi-conductor companies were among last week’s biggest losers: Micron (NASDAQ:MU) lost 5.76%; Qorvo (NASDAQ:QRVO) fell 5.04%; and Skyworks (NASDAQ:SWKS) dropped 4.32%.
As mentioned above, the Materials Index lost 1.25% last week, and indeed, two of its components were among last weeks biggest losers: Arconic (NYSE:ARNC) and Freeport-McMoran (NYSE:FCX) dropped 6.27% and 4.49%, respectively.
Three oil/energy companies didn’t fare too well either: Chesapeake (NYSE:CHK) dropped 5.65%; Newfield Exploration (NYSE:NFX) fell 4.5%; and Apache (NYSE:APA) sagged 4.41%.
Rounding out the bottom ten were electronics retailer Best Buy (NYSE:BBY) and specialty pharma company, Mallinckrodt (NYSE:MNK).
Last week also saw fluctuations in some major Japanese companies with international profiles.
Toshiba Corp. (T:6502) plunged 43% at the beginning of last week, after it announced that complications at its nuclear power plant subsidiary could force a one-time loss of several billion dollars. However, as traders covered their short positions on the last trading day of 2016, the stock rebounded 9.3% on Friday.
Hitachi Koki Co Ltd (T:6581) gained 17% over the week, as news surfaced that private equity company KKR & Co (NYSE:KKR) was in talks to purchase the Japanese power tools manufacturer.
Also on Friday, auto parts manufacturer Takata's (T:7312) stock skyrocketed, up 40% as rumors surfaced that the company was nearing a $1 billion damages settlement with US Federal prosecutors over defective, exploding airbags that have been linked to 11 deaths and 180 injuries in the US alone and forced 19 auto manufacturers to recall 42 million vehicles.
The company is not yet out of the woods though. Even if the settlement deal goes through, Takata could come under further pressure if it is required to plead guilty to criminal misconduct. And, the company still faces a class-action lawsuit and other legal battles .
h3 What to expect this coming week/h3Most global markets will be closed Monday for an extended New Year holiday, and exchanges in Japan and New Zealand will be closed on Tuesday, as well.
Early indications are that the US dollar, which slipped lower at the end of last week could continue to correct, and the euro move a bit higher.
Major US. economic announcements this coming week will also have an influence on markets including Tuesday's ISM Manufacturing PMI, Thursday's ISM Non-Manufacturing PMI and Crude Oil Inventories, and perhaps the most important announcement of the month, Friday's US Nonfarm Payrolls release.
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