BlackRock/iShares - Weekly Investment Commentary: 2015: A Blueprint for 2016?

Weekly Commentary Overview
- Despite the Federal Reserve (Fed) playing to script and meeting market expectations with a 0.25% interest rate hike, U.S. stocks ended the week down. All three of the major averages surrendered their early-week gains.

- The Fed’s 25-basis-point (bp) rate hike was what the market expected, provoking only a modest reaction in short-term interest rates and a yawn on the long end of the Treasury curve. Instead, investors were focused on what happens next.

- U.S. equities continue to struggle with a familiar litany of problems: lack of organic earnings growth, mixed economic data and deteriorating conditions in the credit markets. Unfortunately, it appears next year may deliver more of the same.

- We maintain our overweight to both European and Japanese currency-hedged equities. While neither market has had a stellar year, in local currency terms they have outperformed U.S. equities by roughly 550 and 1100 basis points, respectively, year-to-date. We believe that pattern could continue into the new year.