A Review of 2016
Here's an article from Barron's that gives a very good financial overview of 2016. I hope many of you will find it helpful:
The year 2016 was one that defied predictions. In 2015, the Federal Reserve forecast four rate hikes in 2016, but they only had one. Early in the year, that forecast, along with other economic factors including the dropping price of oil, caused equity markets to have one of the worst starts on record.
When oil hit a low of $26.21 a barrel in February, some analysts forecasted potential mass oil company bankruptcies and a possible U.S. recession, neither of which came true.
One of the next big confusions of 2016 came when polls showed that the United Kingdom was probably going to remain in the European Union when the actual vote was to leave. This event, known as “BREXIT,” caused the markets to plunge. After a sharp two day drop, the S&P 500 started racing higher again.
Perhaps one of the biggest predictions gone wrong was when most polls predicted a victory for Hillary Clinton, but Donald Trump was elected to be the President of the United States. Some felt this would cause an immediate bear market, but instead, post-election investors were treated to a market surge.
Despite all the forecasts of doom and gloom in 2016, equity markets ended the year with strong results. By year-end, the S&P 500 had a gain of 9.5%, mostly due to the post-election hopes that included looser regulations and tax cuts.
(Source: Barron’s 1/2/2017)