Among other news, 2015 brought about a continued decline in oil pricing, the fall of Sepp Blatter’s FIFA and a revision of Volkswagen’s ($VOW.DE) emissions data. We saw Netflix ($NFLX) share prices more than double, the Federal Reserve finally raise rates, and the Oxford English Dictionary make an emoji icon their latest addition.
Energy

Will shale oil production grow or fade in 2016 with or without weak oil prices? It has been estimated by the EIA that 80% of shale oil & gas is located outside of the United States, predominantly in China, Russia and Argentina, with the latter’s new President Mauricio Macri recently confirming a $500 million investment in the resource. This may spell good news for companies like YPF ($YPF) who have already stated that the “South American country’s Vaca Muerta shale formation could be bigger than North Dakota’s Bakken or the Eagle Ford shale in Texas.” [1]

Consumer Discretionary & Staples

AlphaSense blog quoteShould oil prices remain low over the coming months, consumers might expect to see an increase in their disposable income. One might foresee a benefit to discretionary and staple goods businesses, offset by minimum wage increases and other wage pressures. Either way, 2016 may be when the “Hard Soda” (alcoholic “soft” drinks) drives growth for beverage companies, with major players like SABMiller ($SAB.GB), Molson Coors ($TAP) and Boston Beer ($SAM) planning launches in the New Year.[2]  Tweet This

Industrials

The war in Syria, ISIS and the migrant crisis dominated many front pages in 2015 and may continue to do so in 2016. Military action is already underway, and regrettably, will probably escalate before it ceases. Japan has recently increased its defense spending in response to disputes with China, and one might expect other nations to follow suit while conflict remains in the Middle East. Should the U.S. and EU nations do so, this may lead to increased demand for A&D companies like Lockhead Martin ($LMT), BAE ($BA.GB) and Honeywell ($HON).

Technology

Finally, 2016 may see several areas of technology — such as Virtual Reality, Wireless Charging, OLEDs and the Internet of Things — fully take hold. But one new technology may be applicable to everyone using Wi-Fi today is Li-Fi, which uses the visible light spectrum to transmit data. While in its infancy, download speeds may far exceed what is possible with Wi-Fi, and it could be a disruptive technology to watch. Using AlphaSense, we can see that Acuity Brands ($AYI), Ultratech ($UTEK) and Vecco Instruments ($VECO) are a few of the names that have referenced Li-Fi in their filings over the last few months, but companies facilitating this new technology, such as LED manufacturers, may be the main winners here.

Outlook

More broadly, 2016 offers sports fans the Olympics in Brazil and the UEFA Euros in France — no doubt with plenty of drama to be found in each. With a U.S. Presidential election in November, this year will be noteworthy whatever the outcome.

Sources
1. Dow Jones News, YPF CEO Chest Thumps Argentina Shale vs US — Market Talk, April 21, 2015
2. Dow Jones News, MillerCoors Plans to Launch Hard Sodas — Market Talk, August 14, 2015





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