Now that the hectic year of 2016 has come to a close, and financial markets are back to normal operation, it is time to reflect on the year that just passed.
In a year that was ruled by volatility and political concerns, market highlights included the brief equity panic in China in January, the pound’s crash after the Brexit vote, and crude oil’s rally after falling to just $27 per barrel at the beginning of 2016
On Tuesday, Deutsche Bank’s strategist Jim Reid dropped his first Early Morning Reid note of the new year, and included within it a handy round-up of how some of the best and worst performing assets across the world over the course of the last 12 months.
“There’s been a familiar theme throughout the year with the Bovespa [Brazil’s stock index] (+69%) and the Micex [Russia’s index] (+58%) claiming the top two spots in USD total return terms where the rebound in commodities and political developments have played a big part. Oil follows (WTI +45%, Brent +23%) while Copper (+17%) rounds out the top 5.”
On the flipside, the pound, along with Chinese and Italian equities suffered through 2016. Here is Reid again:
“The massive -16% depreciation for Sterling means that Gilts actually returned +11% in local currency terms however. Meanwhile European Banks and the FTSE MIB finished -6% and -10% respectively but it’s worth noting that these assets were down as much as -31% and -23% respectively by the half-way point of the year. So a decent turnaround. The Shanghai Comp (-16%) takes the honour of the wooden spoon but remember that that index was down -23% in January alone.”
Here is Reid’s chart showing the best and worst performers in their local currency:
And here is how things looked in dollars: