Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

The 5 Biggest Stories Of 2015

By Scott FearonMarket OverviewDec 30, 2015 05:30AM ET
www.investing.com/analysis/the-five-biggest-stories-of-2015-377885
The 5 Biggest Stories Of 2015
By Scott Fearon   |  Dec 30, 2015 05:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

As for the markets, investors have had more than their fair share of emotional and actual volatility in 2015. After all the huffing, puffing, and cussing, the S&P 500 and the Dow are more or less flat. That doesn’t surprise me very much (I expected modest gains for the indexes, at best). But a number of things have surprised me this year, some quite a bit. Here’s my list of the five biggest events of 2015, in order of earth-shattering importance:

1. The oil meltdown.

In the wake of 2014′s crash, most experts thought oil was near a bottom. After all, the cost to lift (not drill) a barrel where fracking is required is about $30-$40. But today the spot price of a barrel of West Texas Intermediate crude remains stubbornly below $40. A handful of exploration and energy service companies have already filed bankruptcy. This includes BPZ Resources Inc (OTC:BPZRQ), Quiksilver Inc (OTC:ZQKSQ), Magnum Hunter Resources Corp Pe ADR (N:MHR_pe), Sabine Royalty Trust (N:SBR), and Hercules Offshore Inc (O:HERO). If oil prices do not rally soon, more, maybe many more firms will file bankruptcy in 2016.

2. The wider commodities carnage.

Despite ongoing efforts by the US Federal Reserve and European Central Bank to ignite inflation, other commodity prices fell sharply last year, as well. Gold's down 10 percent, copper 28 percent, and zinc 31 percent. Nickel fell a whopping 44 percent. Many attributed these declines to China, where economic growth has slowed to (for them) a subpar 5-7 percent annual rate. But much slower growth elsewhere has also contributed. Early predictions saw the US growing 3 percent this year after 2014’s so-so 2.4 percent advance. Stop me if you’ve heard this one before, but we didn’t make it over that rather low bar. The US economy grew a disappointing 2 percent in 2015. In other words, our anemic “recovery” from the 2008 financial crisis continues to underwhelm.

3. The FANG feast.

It seems unbelievable in retrospect, but Facebook (O:FB), Amazon (O:AMZN), Netflix (O:NFLX), and Google (O:GOOGL) all started the year in some degree of limbo. In January, I went on CNBC to talk about my book and, to my shock, I was asked if Google could be a “dead company walking.” (My answer: no.) What a difference a year makes. Today the combined market capitalization of Facebook, Amazon, Netflix, and Google has ballooned to $1.2 trillion, or about seven percent of the S&P 500. Bottom line: if you didn’t own some FANG this year, it is highly likely you underperformed the index.

4. Hedge fund performance (or lack thereof).

When I started my fund in 1991, few, if any, folks on Wall Street and nobody on Main Street talked about the “hedge fund industry.” Now, with over $2 trillion managed by US hedge funds, the industry is all over the news—and, this year, the news has largely been bad. Many of the largest funds have produced awful returns, reminiscent of the industry’s dreadful declines in 2008. Possibly the greatest shock has been NYC manager Bill Ackman, whose $20 billion plus fund is reportedly down 20 percent or more. Equally surprising is the notoriety the industry is enjoying these days. Almost every business publication and many general interest magazines have written stories about the hedge fund industry in recent months. And on December 23, the movie “The Big Short” debuted. If it does well, maybe I’ll ask my publisher to look into adapting Dead Companies Walking. I won’t be holding my breath for production to start anytime soon, though.

5. Retail’s swansong?

At beginning of the year, I cautioned investors to resist the temptation to buy into retail turnarounds after a decent holiday sales season. I could post that same article today and it would be just as timely. It seems like people are finally waking up to the reality that the entire sector has undergone a massive disruption. Disappointing revenue and profit growth caused investors to dump many high profile brick and mortar retail stocks last year. Big names like Macy`s Inc (N:M), Wal-Mart Stores Inc (N:WMT), and Nordstrom (N:JWN) are all down significantly. The Wet Seal Inc (OTC:WTSLQ), Quiksilver Inc (OTC:ZQKSQ), American Apparel, and RadioShack all chaptered out, and once iconic merchants like Sears Holdings Corporation (O:SHLD), JC Penney Company Inc Holding (N:JCP), and Kohl`s Corporation (N:KSS) are facing a difficult future, as well. The main reason: the A in FANG, Amazon. The Seattle behemoth has now topped $100 billion in annual revenues, and it continues to expand into every imaginable category. I don’t like to make predictions, but it’s hard to see this shift reversing.

The 5 Biggest Stories Of 2015
 

Related Articles

The 5 Biggest Stories Of 2015

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email