Santoli: Is it a resilient bull or creeping bear?

NYSE traders sing to open 2016

Here is the story of a year:

As the bull market entered its seventh year, its crucial energy sources began to fail. Corporate profit growth flattened out where it didn't fall apart, as the global economy struggled and oil led a stunning commodity collapse.

The painstaking preparations for a move away from zero interest rates led to a jarring, long-deferred re-pricing of financial risk. The world was nearing the limit of easy money's power, and what should have been rare swings in huge asset markets came with unnerving frequency, fouling sophisticated investment strategies.

Sellers were in charge of Wall Street for most of the year. Stocks sagged in the final days of nearly every month, a hint that the clever money was methodically paring stock portfolios — beating a disciplined retreat from land that had delivered them the bounty of (almost) seven fat years.

While the main indexes held up fine on either side of a nasty but brief 12 percent tumble, the majority of stocks lost at least 20 percent. Only an exclusive clique of untouchable tech issues supported the indexes, the stocks forced higher by the pure desperation of investors chasing the handful of companies set to dominate a deflationary winner-take-all consumer boom.

As the year 2015 ended with the S&P 500 down slightly, the tape action resembled the anxious transition to a bear market at a time when the Federal Reserve is operating with no margin for error.

Here's another version, the same events seen from a different angle:

In the seventh year, the bull rested. Having nearly tripled in value since the financial-crisis depths and priced in an age of corporate prosperity and cheap capital, stocks settled back to digest their gains. They were also forced to absorb a barrage of shocks that would have buckled less sturdy markets, from an oil crash and an erratic Chinese slowdown to a surge in the dollar and the first start of a Fed tightening campaign in 11 years.

As the Main Street economy firmed more visibly, equities edged sideways as the collective discernment of investors began to separate winners from losers and companies rationally returned capital to investors through buybacks and dividends.

Though the majority of stocks were left behind by indexes that refused to succumb to the macro shocks, this showed capital shifting around the market but unwilling to exit altogether. The skeptics were saying for years the market had gone too long without a double-digit correction, and now we've had one. The churn helpfully kept valuations from getting more stretched and held investor expectations well in check. The anointed growth leaders might have done all they can for now, but their levitation was the market's way of heralding a new payoff phase of the information revolution.

As 2015 ended in a flattish performance, its signature trait was resilience and a readiness to seize on further strengthening of the domestic economy that would prompt further Fed rate hikes for the right reasons.

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