Stocks got off to a rocky start in 2016 as the S&P 500 closed down 1.5% on the first trading day of the new year. Much of the blame has been attributed to the usual suspect as China's manufacturing slowdown again made headlines. At the risk of repeating myself, this is not altogether surprising as China migrates from an infrastructure-driven economy to a more consumption-driven economy. The stock market action had all the characteristics of another knee-jerk reaction to old news. Despite the sell-off, the primary stock indexes in the U.S. and China remain above the lows hit in September, which was the last time this news was held accountable for stock market volatility.

Other news that likely played a role in yesterday's stock performance was the news of conflict between Saudi Arabia and Iran. Saudi Arabia executed 47 alleged terrorists, including a well-known Shiite cleric. The unrest between the Sunni kingdom of Saudi Arabia and Shiite controlled Iran is reminiscent of the "Arab Spring" conflict of 2011. Back then, the global financial markets seemed to be more heavily influenced by other events occurring at the time.

So, is a bad first day of trading an ominous sign of things to come? Historically, more often no than yes. According to Bespoke, since 1928 there have been 14 occasions when the S&P 500 has closed down more than 1% on the first trading day of the year. In 71% of those, the index closed up for the month. The index had a positive return for the year on 57% of the 14 occasions.

I look forward to providing more insight on the year completed and the year ahead in my quarterly update to be released later this month.

Glenn S. Rank, AAMS, President