Monthly Archives: January 2016

US Stocks

U.S. stocks got off to their second-worst five-day start to a year in history amid plummeting oil prices, Chinese growth concerns and geopolitical tensions. The S&P 500 fell 6.0% while the Dow, Nasdaq and Russell 2000 underperformed with losses of 6.2%, 7.3% and 8.0%, respectively. Stocks looked set to pare losses on Friday morning after the Bureau of Labor Statistics (BLS) reported the U.S. economy added nearly 300,000 jobs in December, well above expectations, but the market faded into the close.

The global risk-off trade led to relative strength for bonds and defensive equity sectors like utilities. The 10-year US treasury yield fell 16 basis points on the week to 2.11% while utilities lost only 0.4%. Municipal bonds picked up where they left off in 2015, outperforming all other asset classes for the week. Despite weakness in oil prices, high-yield bonds held up better than equities but lagged investment-grade credit.

Oil prices continued to tumble as, despite increasing tensions in the Middle East, the supply glut shows few signs of abating. West Texas Intermediate (WTI) crude oil hit a 12-year low on Thursday and finished the week down more than 10% at $32.88. Gold finally got a boost from the growing global economic and geopolitical turmoil, rallying 3.5% for the week.

Economic News

As mentioned, the U.S. economy added 292,000 non-farm payrolls in December, handily topping expectations of 200,000. The headline and U6 unemployment rates were unchanged at 5.0% and 9.9%, respectively, while upward revisions from prior months also added 50,000 to the jobs total. Not everything was rosy in the report, though, as wages, which were expected to grow 0.2%, were flat. A lack of wage growth continues to concern the Federal Reserve and could delay any future rate hikes.

The Institute for Supply Management (ISM) index came in at 48.2, showing further contraction in the troubled manufacturing sector. The reading was the lowest in six years, with headwinds created by a strong dollar and weak global demand. The ISM non-manufacturing index fell to 55.3, but still indicates expansion.

US auto sales came in below expectations for December but still set a record in 2015 with 17.5 million vehicles sold thanks to a strong labor market and low gas prices.

The Federal Reserve’s Federal Open Market Committee (FOMC) voted unanimously to raise interest rates in December, but minutes from that meeting suggested the governors are extremely cautious in tightening monetary policy. The big concern for the FOMC remains inflation, which has yet to climb above its 2.0% target.


China’s Shanghai Composite finished the week down 10% after triggering circuit breakers with 7% intraday sell-offs on Monday and Thursday. Monday’s decline was caused by the latest batch of weaker-than-expected manufacturing data. The privately compiled Caixan purchasing managers’ index (PMI) fell to 48.2, the tenth straight month of contraction. The official government PMI reading was 49.7, the fifth straight month of contraction.

As Kyle Bass predicted on last Sunday’s Wall Street Week episode, the People’s Bank of China (PBoC) continued to allow the yuan to drift lower against the dollar for most of the week. By Thursday, the continued debasement of the currency caused another rapid flight from Chinese equities, leading policy makers to actually reverse course and strengthen the yuan on Friday. Stocks rebounded on the final trading day of the week after circuit-breakers were turned off and amid reports state-controlled investment funds purchased shares.

China continues to pursue a weaker currency in an effort to boost the attractiveness of its exports, but the faster-than-expected debasement has instead reinforced concerns the economy is in even more dire straits than the government is letting on. The devaluation of the yuan also impairs Chinese companies ability to repay debt borrowed previously at dollar-pegged exchange rates.

After dramatically outperforming most world indexes in 2015 with a 9.1% gain, Japan’s Nikkei 225 Index fell 7.0% on the week. Minutes from the Bank of Japan’s (BoJ) most recent monetary policy meeting showed dissent from several board members who believe the bank’s credibility with markets is being damaged by aggressive supplementary policy measures that have had little stimulative effect.


China’s market turmoil was also exported to Europe, where the Stoxx 600 Index fell 6.7%, its sharpest weekly decline since August 2011. Commodity-related shares were hit hardest as concerns over Chinese demand continue to weigh. The flight to safety meant German bunds were strong, with the 10-year staging its strongest advance in a month.

The Eurozone unemployment rate dropped to 10.5%, the lowest level in four years. In keeping with the global trend, however, industrial production in Germany, France and the UK all declined.

Eurozone inflation remained subdued, flat for December and up only 0.2% year-over-year. The data likely means the European Central Bank (ECB) could double down on quantitative easing programs to stave off deflation.

Emerging Markets

Emerging markets currencies continued to weaken against the dollar amid commodity weakness and political instability, punctuated by nearly 2% drops for the Brazilian real and Turkish lira.

Markets also expressed concern over conflict between the two great powers in the Middle East, predominantly Sunni Muslim Saudi Arabia and Shiite Muslim Iran. The Saudis inflamed long-standing tensions by executing a prominent Shiite cleric, which triggered a mob attack on the Saudi embassy in Iran. Saudi Arabia responded by cutting off diplomatic relations with Iran, which in turn banned Saudi exports. The dispute has the potential to derail cooperation to end the Syrian civil war and escalate participation in proxy wars between the two nations in places like Yemen.

Saudi Arabia’s Deputy Crown Prince said the kingdom is considering an initial public offering (IPO) of the state-owned oil company, Saudi Aramco. The company controls by far the largest volume of oil reserves in the world and an IPO could help improve Saudi government’s financial position. There have been suggestions Saudi Arabia-led OPEC has held oil production levels constant despite a supply glut in order to drive marginal producers of U.S. shale out of business, but the approach has also put significant strain on the kingdom’s finances.

In case the week did not have enough drama, North Korea claimed to have conducted a successful hydrogen bomb test, prompting both skepticism and global outrage.


Sales Strategy

Defining sales stages probably sounds about as boring as any sales advice could be, right? Well, the result of this is very exciting. Organizations can increase their sales success by 20 to 30 percent simply by going through the exercise of clearly defining their sales stages!

Why defining sales stages is really useful

Defining your sales stages isn’t just engaging in some tired old pipeline visualization exercise. What you’re doing is creating a shared understanding of the ideal sales process. You set up a series of “valves” in the pipeline that one by one lead to a signed deal.

If, for example, your stages are to make first contact, identify the prospect’s needs and then send them a quote, you don’t want people jumping the gun and sending out quotes before they even know what the prospect needs. You can’t jump from stage 1 to stage 3 and expect a good result.

Defining the stages of a sale is defining how you do things in your organization. It saves time and gets everyone in sync. Defining sales stages also helps you set more specific activity goals.

How to establish your sales stages

You can segment your pipeline into whatever stages you want, but to help you along, here are some examples of typical sales stages:

Create a lead idea
Make initial contact with a potential customer
Find out what it is they want or need
Make them an offer that meets their needs or wants
Offer is accepted and a new customer emerges

Of course, your particular industry and business will influence exactly what stages you create as the segments in your pipeline. Your sales procedures, products or services offered, how your prospects make decisions and other factors all come into play. Just as in plumbing, no single pipeline design fits all situations… thankfully.

Okay, but how can I define sales stages that actually fit my business?

As part of your homework, we’ll walk you through how to specifically define and optimize your own sales stages.

To begin, start by thinking about the decision making and buying processes of your customers. How do they think, how do they approach a purchase and what drives these decisions?
Write down the matching sales stages associated with your customers’ “buying stages”. It really shouldn’t take you longer than 10 minutes or so.
Discuss your sales stages with your entire sales team and get everyone’s input.
Go through all of your typical sales scenarios and make sure that the sales stages you’ve defined match with each of them. If this is going to be a group activity, it’s better in a smaller group.
Review the sales stages with your team. It’s vital that they not only understand the stages, but why they’re so important. Also, make sure everyone agrees on measuring activity at each stage or pipeline segment.
In a month or two, revise the stages once you’ve got more hard information to work with. If any of the stages are confusing, rename, remove or add new stages to accurately reflect what is really happening with your sales pipeline.

Even now, you have the tools necessary to see huge increases in your closing rate and results.