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NEW YORK (Reuters) - Stock and bond markets in major economies closed 2015 with a mixed performance, while oil prices and emerging markets cemented big losses during a year that provided few safe places for investors. While equity markets in Japan and Western Europe gained strongly amid ongoing ultra-easy monetary policy, concerns about global growth and a robust U.S. dollar crushed petroleum prices and took down emerging markets, copper and other metals. Fixed-income posted a middling performance, as riskier high-yield securities fell, largely due to exposure to weakened energy credits. Short-dated U.S. Treasury yields rose. Keep up with this story and more by subscribing now The MSCI All-World Index was down 0.7 percent, and closed the year with a loss of 4.2 percent. For Wall Street's most widely followed average, the Standard & Poor's 500 Index, it was down to the last day of trading to determine whether the year would end negative or not. The benchmark index lost nearly 1 percent for the day, giving its price a 0.7 percent loss for 2015. Including dividends, it posted a positive total return for a seventh straight year. The market's ups and downs this year were triggered by worries about oil, global growth and the Federal Reserve. The uncertainty surrounding the U.S. central bank's plans dominated the last several months of trading, and some were glad to see it finally begin raising rates. "I think that now that the Fed finally did something it will calm the intraday jitters a bit at least for the first six months, and hopefully see investors more committed to positions rather than nervous to hold anything," said J.J. Kinahan, chief strategist at TD Ameritrade. The Dow Jones industrial average fell 1 percent to 17,425.03, the S&P 500 lost 0.94 percent to 2,043.92 and the Nasdaq Composite fell 1.15 percent to 5,007.41. Brent crude gained 3.1 percent to $37.60 on Thursday, after a 3.5 percent drop in the previous session. For the year, Brent slid 34 percent after shedding 48 percent the previous year, and a global supply glut shows no sign of abating. U.S. crude lost 30 percent in 2015, after falling 47 percent in 2014. [O/R] Some analysts like Goldman Sachs say prices as low as $20 per barrel might be necessary to push enough production out of business and allow the market to rebalance. Europe's Eurostoxx 50 index ended the year with gains of 3.5 percent, after losing a bit of ground Thursday. In Asia, Tokyo's Nikkei index, which was closed on Thursday, finished the year up around 9 percent. Other Asian markets have been hit by worries about China, the world's second largest economy, and by oil prices near 11-year lows. MSCI's broadest index of Asia-Pacific shares outside Japan was up slightly on Thursday but shed nearly 12 percent this year. Broader emerging market stocks lost 17 percent in 2015. The outperformance in European and Japanese equities has a lot to do with a strengthening dollar, which has weakened their currencies over the last few years and made their exports more competitive. The euro was down 0.6 percent on Thursday, and fell 10 percent against the dollar in 2015. Against a basket of major currencies in 2016, the greenback gained 9 percent, with a rebounding jobs market convincing the Federal Reserve to 'lift off' on interest rates earlier this month. "The Fed could come back with a second hike in March, which is not fully priced in, and the dollar should draw fresh support from that," said Richard Franulovich, senior currency strategist at Westpac in New York. Currency strategists predict the dollar will add another 4 percent next year. The dollar was particularly strong in 2015 against commodity currencies: It hit a more than one-year high against Russia's rouble on Thursday, and its highest in at least 13 years against the Norwegian crown the previous day. In debt markets, the U.S. 10-year Treasury yield was at 2.275 percent; it rose modestly in 2015 from 2.17 percent at the beginning of the year. Much of the year's rise in yields was in short-dated securities on expectations of higher rates from the U.S. Federal Reserve. The two-year yield rose to 1.05 percent, compared with 0.68 percent at the beginning of the year. German bonds ended their most volatile year since 2011 with yields higher than they were at the end of 2014, showing the limitations of ultra-easy monetary policy with global disinflationary forces at work. Ten-year yields closed at 0.63 percent on Wednesday, up 9 bps on the year and far from record lows of 0.05 percent touched in mid-April. High yield debt was the worst performer among fixed income in 2015. The Bank of America-Merrill Lynch U.S. High Yield index fell more than 4.6 percent for the year; its U.S. Treasury index gained about 0.65 percent. Metals were broadly weaker in 2015. Copper futures lost 25 percent on the year, while spot gold fell 10.5 percent. cloud VMS, vending retrofit, smart vending solution, vending vms, cashless payment, vending route optimization |
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While politicians spent the first anniversary of the stimulus bill debating its merits, I spent the day traipsing around Brooklyn to figure out how the federal dollars flowed through my neighborhood: from the residential streets of Carroll Gardens to the downtown office buildings to the border of the Gowanus Canal. Back in Washington, Democrats and Republicans argued about the effectiveness of the American Recovery and Reinvestment Act. The White House sent officials into 35 different communities to tout what it saw as the bill's main benefits: job creation, tax cuts, extension of unemployment insurance, aid to local governments, and infrastructure projects. Republicans questioned the number of jobs the bill created, and most economists said that the stimulus bill staved off a massive economic collapse. While the national debate continues, my neighborhood stimulus tour showed that small businesses are still struggling; stimulus money largely went to established institutions and agencies for short-term gains; and few people, even those who benefited from the money, really understand how the stimulus has worked. That's true for Peter Byrnes, the owner of Lúgh Studio Inc.—a graphic-design firm that is sandwiched between a coffee shop and my favorite spot for takeout tacos. In March 2009, Byrnes's seven-person firm received a stimulus-backed loan of $150,000 that enabled him to pay an outstanding American Express bill and payroll taxes, and provided a much-needed cash cushion. But it did not help him hire new workers, restore his company's health insurance, or reinstate the employees' 20 percent pay cut. In fact, since he received the loan, he has laid off three workers. "Oh, my gosh, it wasn't a stimulus," he says. "It was a stopgap." Keep up with this story and more by subscribing now With the help of Recovery.gov, I turned up five businesses—large and small—that have received about $1 million in the last year, along with nonprofits, real-estate companies, city agencies, and universities that received another $11.3 million. Among them: the Polytechnic Institute of New York University, which garnered $4.2 million in grants and subcontracts to study protein engineering, renewable energy, and cybersecurity. The New York City Fire Department got $2.7 million to buy equipment to better patrol Brooklyn's ports. A real-estate owner named Jacob Frankel, with offices at 32 Court Street, received roughly $750,000 to maintain and repair low-income housing units, according to the federal government's Web site, and another real-estate company named Greenwich Street Equities took out a $1.5 million government-backed loan to build a boutique hotel in an up-and-coming industrial neighborhood. Most of the resulting jobs appear to be temporary. The $1.5 million loan for the boutique hotel will employ 50 to 60 subcontractors and construction workers until the property is completed, says real-estate developer Alec Shtromandel. The Polytechnic Institute is using pockets of the money to temporarily hire Ph.D. students and postdoctoral fellows to do the extra research, says Kurt Becker, associate provost of research and technology initiatives, but these will not become administrative jobs. The North Brooklyn Business Outreach Center in Ft. Greene is using its grant of $600,000 to hand out microloans to very small business owners: from livery cabdrivers to child-care providers to fashion designers looking to expand their businesses. Byrnes says his chief complaint is that the stimulus package did not give small business owners like him more access to credit. Lúgh Studio has seen its credit slashed in the past year from roughly $106,000 to $14,000, with a 22 percent interest rate. "I have printing bills higher than $14,000," Byrnes says. "It's outrageous that the banks received enormous bailouts, and now that they are showing a profit, they are charging higher fees on credit cards for people like myself." A policy fellow at the Brookings Institution levels another criticism at the stimulus projects in cities: namely that the federal government did not apply the money to innovative or new programs. Rather than use the leverage of $787 billion to rethink and reshape the economy, the government funneled the money through well-established agencies, says Mark Muro, policy director of the Metropolitan Policy Program at the Brookings Institution. In my Brooklyn neighborhood, the most "innovative" money went to the Polytechnic Institute to do research on renewable energy. Other big pots went to city agencies such as the N.Y.F.D.; social programs such as Brooklyn Child and Family Services; and federal government agencies such as the Department of Housing and Urban Development and the Small Business Administration. "It's a lot of business as usual," Muro says. "A lot of the money was channeled through separate silo programs. The ultimate impact was that money was distributed across lots of small-bore items." Funding small-scale projects like hotel construction and equipment purchases for fire departments may also leave people unaware of the stimulus's footprint. Lúgh Studio workers did not know that the $150,000 loan they suddenly received in March came from the stimulus. It took the New York office of the Department of Housing and Urban Development three days to track down the addresses of the low-income apartments supported by the $750,000 grants. Block-to-block in Brooklyn, residents do not understand the ways in which the stimulus has burrowed down into the fabric of its smaller neighborhoods. What people do understand is the project's enormous price tag. This is not to say that stimulus has not worked. The package was meant to quickly give the economy a jolt and prevent another Great Depression. Independent economists from the Congressional Budget Office to Moody's agree that it accomplished these tasks, in addition to already adding 1.6 million to 1.8 million jobs to the economy. For Brooklyn business owners such as real-estate developer Shtromandel, the stimulus gave him leeway to do a project that otherwise would not have been possible. "We would not have purchased the land. It just would not have materialized," he says. NEWSWEEK's Daniel Gross points out that it's too early to write the stimulus's postmortem. Another $515 billion in tax cuts, contracts, loans, and money for entitlement programs still needs to work its way through towns, cities, and neighborhoods over the next two years. But my own little neighborhood stimulus tour shows that so far the average person has little idea how it's working. That can't be good news for defenders of the package. Tags:automation, industrial-transport, inhand, inhand network, inhand networks, InHand Networks - Global Leader in Industrial IoT, Global Leader in Industrial IoT |