? Looming Fed rate hike weighs on stocks globally
? S&P500 loses 3.8% weekly
? Oil prices lose nearly 11% amid elevated OPEC production
? Losses extend to other energy commodities and commodities in general
? Global flight to safety supports sovereign bonds, sending yields lower

Stocks suffered massive losses towards the end of the week, accompanied by an overall flight-to-safety reflected by strong declines in commodity prices, namely oil, and some moderation of the yield curve.

Specifically, the S&P500 has dropped nearly 2% on Friday’s session, which marked its worse daily performance since the end of September. Alongside a few negative days at the start of the week, the leading U.S. index recorded a total of 3.8% weekly drop. Other U.S. Indices saw similar losses. The Dow, namely, decreased 3.3% during the week and the Nasdaq scalped 4.1%. Declines in equity extended into global markets, with the DAX losing 3.8% weekly, the FTSE 100 down nearly 4.6% and the Hang Seng losing 3.5%.

Weakness extends to commodities in general and triggers a flight to safety

Decreases in oil last week amounted to 10.9%, making this the largest percentage-wise decline for oil since December 2014. Monday alone accounted for approx. half of the weekly decline. At USD 35.62 a barrel, the black gold is at its lowest level since 2009. OPEC’s Dec 4th announcement, that it would not cut production, has certainly shaped the path of prices.

Oil is not the only commodity in red territory this week as energy prices have, in general, been showing signs of weakness. Natural gas lost 3.7% during the week. Declines have also been significant with precious metals, as silver lost 4.3% during the week, to USD 13.92 per oz. Gold prices recorded smaller losses, benefiting from market participants seeking safer havens for their investments. Gold has lost a tad more than a percentage point during the week, to USD 1074.77 per oz, though it’s still approx. 2.7% higher than the levels recorded at the beginning of the month.