The New York stock market closed up last week for the first time in this short year. Stocks have been on the slide or at best posting sluggish gains since the “mini-crash” that occurred during late last summer. While it is still too early to predict where the markets will go in 2016, the early gain is widely viewed as a positive sign.
One of the main reasons the market ended the week on a positive note was a nine percent rise in the price crude oil. While consumers are enjoying the lowest gasoline prices in the past ten years due to the oversupply of crude, oil producing nations, refiners, and gas retailers have been showing softening margins. After sinking to a low of around $28 a barrel, last week saw the largest weekly increase in crude prices since last August.
Another factor in last week’s gains was a growing, but still skittish confidence in the markets. Several of the bell weather stocks of the Dow Jones Average posted profits that meant or exceeded investor and analyst expectations. Also, a couple of the firms announced major acquisitions or mergers like GE’s selling off its major appliance division to the Chinese manufacturer Haier. Other companies announced cost cutting realignments of their business units. American Express was an example of this announcing plans to save over a billion dollars in operating cost over the next twenty-four months.
Some analyst, like Joe Sowin, the head of global equity trading at Highland Capital Management, said last week’s gains were the result of investors covering short sale contracts. Short sales occur when an investor essentially sells a stock he doesn’t own and agrees to deliver that stock on a given date while receiving the proceeds in advance. If the stock price goes down, the investor profits on the spread of the shorted price and the price he purchases the stock.
Highlands Capital Management was founded by Jim Dondero in 1993 after a successful career with both American Express and the GIC subsidiary of Protective Life. Jim graduated with honors from the University of Virginia with a dual degree in accounting and finance. He also received training while completing the prestigious training program offered by Morgan Guaranty.
In addition to his work at Highland Capital, Jim serves as the chairperson for the board of directors at Cornerstone Healthcare, CCS Medical, and Nexbank, and is an active board member at MGM Studios and American Banknote. Highland Capital has earned many awards in the investment community including the HFM Best ’40 Fund for its Long/Short Healthcare Fund. Under Jim’s guidance, the company has also been a leader in innovative credit strategies for its clients.
This article recapped http://www.cnbc.com/2016/01/22/us-markets.html