Call us today!

Phone: (512) 498-PLAN (7526)

Weekly Vantage Point | 12.14.15

Equities End Week Sharply Lower

December 14, 2015 – U.S. stocks fell sharply on Friday, with the S&P 500 capping its worst week since late September, as investor optimism about the economy faded ahead of this week's December 16 Federal Reserve interest rate decision. Energy companies slumped the most as crude oil futures closed at lows not seen since 2009, renewing deflation concerns. Financials fell the most since the week of August 21 as the expected shift in monetary policy hurt asset managers amid a rout in high-yield corporate bonds. Besides concerns over a looming rate hike, non-investment grade corporate bonds are also suffering under expectations that defaults could accelerate for energy and commodity producers.

Among key economic releases last week, wholesale inventories declined 0.1% in October, yet year-over-year (YoY) inventories are rising way ahead of sales. Inventories are up 3.6% YoY, while wholesale revenues are down 3.7% over the past 12 months. Weak oil prices together with the strong dollar are keeping international trade prices depressed, with November export and import prices falling 0.6% and 0.4% respectively. Lastly, retail sales rose 0.2% last month, shy of forecasts, while sales excluding auto and gas revenues rose 0.4%, 0.1% above economists' consensus forecast.

For the week, the S&P 500 fell 3.74%, ending at a two-month low that curtailed a three-week bullish trend. The Dow Jones Industrial Average lost 3.26% and the NASDAQ Composite slumped 4.04%. All ten major sector groups ended in negative territory, with Energy (-6.40%), Financials (-5.33%) and Materials (-4.07%) suffering the largest losses. Utilities (-1.67%) and Consumer Staples (-1.95%) fell the least. West Texas Intermediate (WTI) crude oil ended at $35.62/barrel, capping its sixth weekly decline, plunging 10.9% last week and is down 25% since Halloween weekend. The CBOE's VIX Volatility Index, a measure of investor anxiety, surged 65% last week, including a 26% jump on Friday. Treasuries advanced last week, with the yield on 10-year Treasury notes falling 14.2 basis points to finish at 2.128%.

newspaper icon
Week’s Economic Calendar

Monday, December 14: No major releases;

Tuesday, December 15: FOMC meeting begins, Consumer Price Index, Empire State Mfg., Housing Market Index;

Wednesday, December 16: Housing Starts, Industrial Production, PMI Mfg. Index, FOMC Interest Rate Decisions, Forecasts at 2:00 pm EST and Fed Chair Press Conference at 2:30 pm EST;

Thursday, December 17: Jobless Claims, Philly Fed Business Outlook;

Friday, December 18: PMI Flash Services Index, Kansas City Fed Mfg. Index.

world icon
Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones -3.26% -2.57% 5.06% -3.13% -1.88%
S&P 500 -3.74% -3.19% 3.17% -0.27% 0.96%
NASDAQ -4.04% -3.41% 2.61% 5.34% 6.01%
Russell 3000 -3.90% -3.60% 1.94% -1.11% 0.39%
MSCI EAFE -2.39% -2.91% -0.41% -2.38% -3.03%
MSCI Emerging Markets -4.75% -4.98% -3.34% -17.31% -16.26%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond 0.47% 0.29% 0.50% 1.17% 1.37%
Barclays Municipal 0.51% 0.517% 2.29% 3.17% 3.28%
Barclays US Corp High Yield -2.35% -2.57% -5.25% -4.52% -3.53%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity -4.01% -3.27% -11.79% -24.80% -29.13%
S&P GSCI Crude Oil -6.81% -10.56% -17.32% -30.07% -38.13%
S&P GSCI Gold -0.77% 0.98% -2.50% -9.15% -12.24%
Source: MorningStar
Chart of the Week: Oil Pessimism Intensifies After Latest OPEC Meeting
View larger image »

Source: OPEC, JP Morgan

At its December 4 meeting, OPEC maintained oil production at its current level of 31.5 million barrels/day. While largely expected, the move effectively removes the ceiling on OPEC production, thereby increasing production in the midst of a global supply glut. OPEC's strategy over the past 18 months has been to maintain market share at the expense of other non-OPEC producers, namely U.S. shale players, and ultimately price them out of the market. With both U.S. and OPEC production increasing, more pain should be felt in the energy sector. However, given OPEC's persistent strategy, there have been signs of future waning production in the U.S. as companies scale back on replacement capex (infrastructure investment) and as active rig counts continue to decline. Inevitably, these measures will lead to less output in the longer term, with agencies such as the EIA and IEA expecting U.S. production to decline by 0.5 million barrels/day and demand increasing by 1.6 million barrels/day in 2016. Energy-related securities in both equity and fixed income markets will likely experience pain in the near term, but value may be found in companies with low debt levels, efficiencies of scale, and strong balance sheets who can successfully manage through the current low price environment.

Copyright © 2015 Cetera Financial Group, Inc., RCS Capital Corporation’s (NYSE:RCAP) retail investment advice platform.
All rights reserved.
200 N. Sepulveda Blvd, Ste 1200, El Segundo, CA 90245
Privacy Policy - Contact Us

This report is created by Tower Square Investment Management LLC

About Tower Square Investment Management

Tower Square Investment Management LLC is an SEC registered investment adviser owned by Cetera Financial Group®. It provides investment research, portfolio and model management, and investment advice to its affiliated broker-dealers, dually-registered broker-dealers and registered investment advisers.

About Cetera Financial Group

Cetera Financial Group® is the retail investment advice platform of RCS Capital Corporation (NYSE: RCAP) that delivers the benefits of scale to its family of independent broker-dealer firms and registered investment advisers while providing a framework that nurtures relationships, unique cultures and unbiased objectivity. As the second largest independent financial advisor network in the nation by number of advisors and a leading provider of investment programs to financial institutions, Cetera Financial Group provides award-winning wealth management and advisory platforms, comprehensive broker-dealer and registered investment adviser services, and innovative technology to its family of broker-dealer firms nationwide.

Through those firms, Cetera Financial Group offers the stability of a large, established broker-dealer and registered investment adviser, while serving independent and institutions-based financial advisors in a way that is customized to their individual needs. Cetera Financial Group is committed to helping advisors grow their businesses and strengthen their relationships with their investor clients. All of the Cetera Financial Group broker-dealer firms are members of FINRA/SIPC. For more information, visit


The material contained in this document was authored by and is the property of Tower Square Investment Management LLC. Tower Square Investment Management provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative or investment adviser representative is not registered with Tower Square Investment Management and did not take part in the creation of this material. He or she may not be able to offer Tower Square Investment Management portfolio management services.

Nothing in this presentation should be construed as offering or disseminating specific investment, tax, or legal advice to any individual without the benefit of direct and specific consultation with an investment adviser representative authorized to offer Tower Square Investment Management services. Information contained herein shall not constitute an offer or a solicitation of any services. Past performance is not a guarantee of future results.

For more information about Tower Square Investment Management strategies and available advisory programs, please reference the Tower Square Investment Management LLC Form ADV disclosure brochure and the disclosure brochure for the registered investment adviser your adviser is registered with. Please consult with your adviser for his or her specific firm registrations and programs available.

No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context.

All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision.

The Barclays U.S. Aggregate bond Index is an unmanaged index composed of Barclays Credit government bond index, mortgage backed securities index, and asset backed securities index and is generally representative of the US Bond market.

The Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt.

The Barclays U.S. Municipal Bond Index is an unmanaged, market-value-weighted index of investment-grade municipal bonds with maturities of one year or more.

The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It is composed of futures contracts on physical commodities and is designed to minimize concentration in any one commodity or sector. It currently includes 19 commodity futures in five groups. No one commodity can comprise less than 2% or more than 15% of the index, and no group can represent more than 33% of the index (as of the annual reweightings of the components).

The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility.

CRB Index: A pricing index that measures changes in the price of 22 commodities that are believed to be among the first to react to changes in economic conditions.

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.

MSCI Emerging Markets is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.

The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad based index.

The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.

The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry grouping (among other factors) designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.

The S&P GSCI Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark tracking the COMEX gold future.

The S&P GSCI Crude Oil Index is a sub-index of the S&P GSCI and provides investors with a publicly available benchmark for investment performance in the crude oil market.

Life and Business Strategies...Start the Journey

CONTACT US: 2700 Via Fortuna Suite 100 • Austin, TX 78746 • (512) 498-7526
Fax (512) 684-8519 •

Investment Advisory services offered through, Waterloo Capital, L.P. a SEC Registered Investment Advisor. Securities offered through Calton & Associates, Inc. Member FINRA/SIPC OSJ 2701 N. Rocky Point Dr., Suite 1000, Tampa, FL 33607 (813) 605-0918 Waterloo Capital, L.P., PlanningWorks, Inc. and Calton & Associates, Inc. are separate entities.

A Registered Representative may only transact business in states where they are registered, or exempt from registration. Currently we have Representatives registered in CA, CO, FL, GA, IL, MN, MO, NE, NM, OH, PA, SC, and TX. If your resident state is not listed, please contact us at Under normal circumstances, securities licensing procedures for additional states may take 24-72 hours. We will not effect or attempt to effect securities transactions, or provide personalized investment advice to, or communicate directly with residents in a state in which a Representative is not registered.


Website Design For Financial Services Professionals | Copyright 2020 All rights reserved