US stocks went on a slide on December 28. The multiset rally of the market halted and the Dow crashed back from the near 20,000 peak. The primary sectors of the Standard & Poor 500 ended lower on December 28. The benchmark index slid the maximum in its one-day history since October. Two best performing industries- materials and financials- were hit the maximum. Both slid by approximately one percent.
The presidential election of Trump has earlier resulted in Equities showing a strong surge in values. Investors have betted that Donald Trump, the President-Elect, will implement the policies he has earlier promised during his election campaign. Such policies include substantial deregulation and corporate tax cuts. These are expected to give a fillip to US economic growth. Concerns, however, are raised over the speed and size of the valuation of the market.
For the markets, the last week of any year is generally a quiet one. A few news events like corporate earnings or central bank meetings are par for the course. These chart out the direction of the market. The market session on December 27 was characterized by the lowest composite trading volume in NYSE of any complete session in 2016. While such conditions result in a market with any pronounced direction, lower liquidity may also leave the equities susceptible to extreme swings.
Valuations and profits
According to Mark Luschini of Janney Montgomery Scott, valuations have been a source of worry for almost a year. The context of such an outlook is whether there is a possibility of more measured or substantial move northward from here. It is to be seen whether there can be any follow through with rally in this week. He hopes for a positive ending to 2016.
Even traders unconcerned about valuation could look towards taking profits. They may also lock in the gains of 2016. Nvidia Corp. listed in the S&P 500 remains the largest gainer in 2016, although it stumbled on December 28, falling about 6.9 percent. The stock tripled its volume in 2016. The semiconductor sector was influenced by the stock’s decline. This in turn lowered the technology shares. There was a dip of 0.9 percent in the S&P technology sector, and is counted among worst performing industries at that point of time. The DJIA or Dow Jones Industrial Average dropped about 111.36 points to stop at 19,833.68, a decline of almost 0.6 percent.