Saying stocks went nowhere in 2015 would be a horrible oversimplification

The S&P 500 closed 2014 at 2,058.9. On Tuesday, it opened at 2,060.5.

In other words, the stock market has effectively gone nowhere this year.

But to actually characterise 2015 as a year when stocks went nowhere would be a horrible oversimplification of what happened. It would belie the dynamic, multifaceted economic story that actually occurred.

Two big macro themes are certainly worth highlighting: 1) oil prices stayed very low, crushing profit margins for drillers, and 2) US consumer spending was robust, at least partially aided by low energy prices and high employment.

In the S&P 500, energy stocks are down 23% this year, making it by far the worst-performing sector of 2015. Meanwhile, consumer discretionary stocks are up 9.1%, making it the best-performing sector.

“Hail the consumer!,” Gluskin Sheff’s David Rosenberg extolled.

Cotd sp500 sector performance

Rosenberg additionally pointing to new MasterCard data that revealed holiday spending this year had jumped 7.9% from a year ago. (We’d add that Rosenberg circulated his note before Tuesday’s surprisingly strong consumer confidence report.)

“The American consumer is set for a breakout year in 2016 as wage gains accelerate, the job market continues to generate payroll gains of at least 200,000 per month … and the household sector has some dry powder to put to work as well with the personal savings rate starting off 2016 well in excess of 5%,” Rosenberg said.

“So don’t be surprised if in another flattish year for the S&P 500 that we again see the Consumer Discretionary group emerge atop the leader board.”

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