“When the fear of losing money overcomes the fear of looking stupid . . . that’s a bottom!” — Arthur Cashin

1. China GDP Growth Sinks to 25-Year Low — China’s Q4 gross domestic product eased to 6.8% from a year earlier, while full-year growth slipped to 6.9%, adding to the troubling economic picture that’s unsettling traders around the world. Experts expect Beijing may do more to stimulate its economy.
2. Iranian Sanctions Come to An End — July’s nuclear deal between Iran and six world powers came into effect, triggering an end to years of sweeping sanctions on Tehran. $100B worth of Iranian assets are set to be unfrozen and many global companies will now be permitted to do business with the Islamic Republic. Iran has also said it plans to scale up oil production and exports by 500K bpd – a move that comes as crude prices languish below $30/bbl and amid deteriorating relations with Saudi Arabia.
3. Saudi Arabia Warns Banks Against Riyal Speculation — the Saudi Arabian central bank has warned commercial banks against betting on depreciation of the riyal as tumbling oil prices put pressure on the Saudi currency. Banks and hedge funds are also speculating that low oil prices might eventually prompt Riyadh to scrap its peg to the U.S. dollar (which has been linked since 1986). Bets for a devaluation of the riyal reached their highest in almost two decades this month, driving 12-month forward contracts to their highest since at least December 1996.
4. Russia Ruble’s Dramatic Plunge Continues — Russia’s ruble fell more than 5% late last week, to hit a new record low of 85.97 per dollar amid a global crash in crude prices. The country is suffering considerably from the oil slump, which has sparked widespread predictions of a second straight year of recession.
5. Venezuela Fears of Default Grows — the plunge in the price of oil is causing more investors to bet that Venezuela will default on its $120B pile of foreign debt, an event that would trigger a messy battle over the country’s oil shipments and deepen its economic and political crisis. Oil accounts for 96% of Venezuela’s export earnings.
6. AAII Bullish Sentiment Ticks Higher — according to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment increased from last week’s depressed reading of 17.9% up to 21.52%. Even at that level, though, sentiment remains extremely bearish.

The week ahead — Economic data from Econoday.com: