It’s hard to spin the worst market week ever to begin a new year

Perhaps it was an omen that 2015 ended without a Santa Claus rally, and the final two days of trading were both in the red for most markets, but not many could have predicted that 2016 would start out with not only a continuation of the prior week’s trend, but end the week with a historic event for U.S. markets.

The worst week ever to begin a new year.

Not even in the Depression years of 1930 - 33 did the stock markets have a worse beginning to a new year, where on every single day at least 2 or 3 primary markets closed in the red.  And following the October crash of 2008, and the subsequent Great Recession that saw stock markets fall from 11,600 down to 6,600 at their trough, did either 2009 or 2010 begin worse than what took place this past week.

Graphic courtesy of Zerohedge

Graphic courtesy of Zerohedge

Much of this volatility stemmed from a combination of geo-political events (Iran/Saudi Arabia and from North Korea), as well as turmoil in Chinese markets where new circuit breakers ended Wednesday’s session only 30 minutes into trading.  But the fact of the matter is, the U.S. markets have been extremely top heavy for awhile, with a few heavy hitter stocks like Facebook, Apple, Netflix, Google, and Amazon holding up the S&P while the remaining 490 equities spent most of the year languishing or at best stagnant.

Starting on Monday, earnings will begin to tell the tale on whether this week’s trend should continue, or if it was simply a bad hangover from too much New Year’s partying.  But with Macy’s already set to layoff 2500 workers and re-organize just days after the end of the Christmas holiday season, expectations should point towards a bad consumer spending push since Black Friday, and a recognition that the bubbles the Fed created to prop up markets no longer are able to hold onto artificial gains.

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

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