US Indices Close 2016 Riding High

With its strongest showing in three years, the Dow Jones Industrial Average finished 2016 with double digit percentage returns. The feat has only happened four times in the past decade, adding to positive sentiment amongst traders even after weak year-end trading volumes. Although the Dow Jones was on pace earlier in December to reach the 20,000 threshold, the index pulled back after highs on December 20^th, when it closed at 19,932.

After a 9.40% climb during 2016, the S&P 500 was just slightly shy of double-digit growth, ending what would have been the sixth such gain in the past 10 years. Upon closer examination of the S&P 500, energy was the leading sector as far as returns, with a significant 23.40% gain, while financials and telecommunications services improved by 19.10% and 17.10%, respectively.

In spite of an illiquid market environment due to the holidays, EURUSD soared during Thursday’s trading, sending shockwaves throughout currency markets. Friday’s session displayed a surprising rise in activity for currencies as EURUSD, the interbank markets’ most liquid currency pair, climbed between the US and Tokyo sessions.

The pair surged by 1.20% in the minute before midnight. All Euro pairs reacted similarly, with the Pound and Dollar crosses seeing the most action. Regardless, the major movement was not so surprising given usual start-of-year conditions. Euro Futures saw 20,000 contracts turn over during the hour, the heaviest trading volume since two weeks earlier.