Will Markets Rebound in 2016?

Beyond near-term trading concerns on a day where markets close at noon Eastern Time today, the changing of a new year is a good time for reflection. The year 2015 clearly had its share of headwinds — plunging oil prices, China’s yuan devaluation and geopolitical concerns grabbing headlines and putting bricks onto the wall of worry — but there looks to be some signs of hope:

Namely, the firming of economies in the Eurozone and elsewhere should keep markets chugging forward into 2016. Its embrace of a Quantitative Easing program, which proved a sage move by the U.S. Fed a couple years back, has helped backstop market sentiment in the recently beleaguered region. This suggests the most precarious possible scenarios may now be in the rear view for Europe, which is certainly welcome news for most multinational corporations here at home.

Also, China’s currency devaluation, which created a nasty ripple effect this past August when many investors were off water skiing or attending music festivals, may actually prove to be helpful going forward. Starting from a different valuation point might assist Chinese companies — especially ones in the minds of many American investors, like Alibaba (BABA) — to bring stronger, truer gains in 2016 and beyond. After all, 9 percent growth in China is no charade, and even if that is ratcheted down further in the near future, it’s now impossible to deny China’s positive impact on the global economy as a whole.

Here at home, we saw a jump in Initial Jobless Claims of 20K to 287K for the week, higher than the 277K 4-week moving average. We had enjoyed 30 weeks or so of sub-280K jobless claims, but we’re still along the general trajectory of U.S. job growth indicated by the past several monthly Bureau of Labor Statistics, which has shown U.S. unemployment down to a historically pleasing 5 percent. This remains good news for American markets; while we’re not exactly seeing robust growth, bigger is still better than smaller.

Of course, we’d rather see full-time employment increase, as well as a re-trained workforce ready to take on the challenges of a future global economy. Like it or not, we are in a “macro-flux” period of switching out dated industries and efforts (which are tried and true) for forward-looking ones (unproven and risky). That said, looking toward renewable energy solutions seems to be the smarter bet than sticking with industries like coal mining.

In any case — onward and upward! Here’s to you, conscious investor. All the best in 2016!