US STOCKS GET CRUSHED

It’s over.

For now.

US stocks got slammed again on Friday as the market continues its terrible start to 2016 that is among the worst starts to the year for stocks in history. In fact, on a first-10-trading-day basis, this is the worst start ever. Yes, ever.

Crude oil also continues diving to new lows with Brent crude oil, the international benchmark, falling below $29 at one point on Friday.

The Australian dollar was also caught in the selling, falling to a fresh six-year low.

Markets will be closed in the US on Monday though markets abroad and futures markets will be open, so, unfortunately, this isn’t likely to be a long, relaxing weekend for US investors. In fact, it will probably be neither.

First, the scoreboard:

  • Dow: 15,987, -391, (-2.4%)
  • S&P 500: 1,880, -42, (-2.1%)
  • Nasdaq: 4,488, -126, (-2.7%)
  • WTI crude oil: $29.65, -5%

And now, the top stories on Friday:

  1. Stocks! Oil! Data! Friday had it all as markets in the US woke up to futures trading sharply lower which was followed by a torrent of US economic data that gave a mixed picture on the economy that was just bad enough for the sellers to remain energised all day. And what’s more, in his daily brief on Friday White House press secretary Josh Earnest said Treasury was monitoring the sell-off. In oil news, the latest US oil rig count from Baker Hughes showed the rig count fell by 1 this week to 515, though the decline in rigs hasn’t really stopped production from remaining robust. Business Insider’s Chris Woody also highlighted an often overlooked economy that is really struggling with the oil crash: Mexico.
  2. On to the data. Retail sales in the US fell in December, capping a year that was the worst for retailers in the US since 2009. “A disappointing headline and even worse details suggest that spending in Q4 will likely drag GDP down even further,” BNP Paribas’ Bricklin Dwyer wrote in a note following Friday’s report. The University of Michigan’s latest consumer confidence measure, however, showed that Americans are still feeling good about things in general, though Ian Shepherdson at Pantheon Macro said this reading will likely drop later this month as more people notice what’s going on in financial markets.
  3. But so with bad retail sales and good consumer confidence figures, we basically made the argument that things are fine. Or at least, not falling apart. Torsten Sløk at Deutsche Bank cited a chart of Google Search results for “recession” in the US and argued that people aren’t that worried about, and you can take that or leave it. But while financial markets are freaked out for a variety of reasons and manufacturing seems to be dragging big time, there aren’t yet any clear signs that consumers are going into hibernation mode as they did before the financial crisis.
  4. But manufacturing is bad. The New York Fed’s Empire State Manufacturing Survey index fell to its lowest level since the recession in January, which is just never the kind of thing you want to hear. “Indexes for the six-month outlook fell sharply this month, suggesting that optimism about future business conditions weakened considerably,” the survey said. “The index for future business conditions plunged twenty-six points to 9.5, its lowest level since 2009.”
  5. Industrial production data from the Federal Reserve also disappointed on Friday with production falling 0.4% in December, more than expected. Capacity utilization also declined to 76.5% in December, and this just adds to the theme that manufacturing in the US stinks right now. BNP’s Dwyer added in a note to clients Friday following this report that this data, “suggests some downside risk to our already subdued expectations for 2016.”
  6. In news that Business Insider readers were particularly drawn to on Friday, Walmart said it will close 269 stores and lay off thousands of employees. The closures were mixed across the company’s store types, though most of them were concentrated in Walmart Express locations, which have been a pilot program for the retailer since 2011. The company said it was shifting its focus to its Supercenters and Neighbourhood Market stores and, one would imagine, hoping to bolster its e-commerce business.
  7. And so since stocks are falling there are billionaires available to comment. (We’re not actually sure if those things are related, but, you know, they are both things that happened.) Larry Fink, CEO of BlackRock, the world’s largest investment firm, said on CNBC that the market volatility we’ve seen to start this year will spark layoffs in the corporate sector because executives are going to take the market’s instability as a sign the economy isn’t doing that well. Leon Cooperman sort of took the other side of this and attributed a lot of the selling to high-yield bond investors who can’t sell their actual bonds because, well, liquidity and all that, and instead are selling the S&P 500 as a hedge. What we do know is that stock are lower, rich and good investors have thoughts about why, and it is definitely still all about bond market liquidity.
  8. In company news, Citi reported earnings that beat by a penny but the stock got crushed. Disney, meanwhile, was downgraded at Barclays because of ongoing issues at ESPN. Its stock also got crushed. Such was the day.

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