Business review by the Economist

In much of the world, stocks rose in 2016

Stock markets had a good 2016. The S&P 500 rose by 10 percent over the 12 months and the Dow Jones by 13 percent. The FTSE 100 recovered from its Brexit wobbles to end 14 percent up; Russia's RTS index soared after the election of Trump to finish 52 percent higher; and Brazil's Bovespa rose by 39 percent — despite, or because of, the defenestration of the president. But Italy's main index fell by 10 percent, and China's Shanghai Composite never fully recovered from its turbulent start to 2016, ending the year 12 percent lower.

President-elect Donald Trump picked Jay Clayton, a legal expert on mergers and acquisitions, to be the next head of the Securities and Exchange Commission.

The European Central Bank raised its estimate of the capital shortfall at Monte dei Paschi di Siena to $9.1 billion. The troubled Italian bank has requested a bailout from the government after running out of time to raise new capital privately.

Deutsche Bank agreed to pay $7.2 billion to settle with the U.S. Department of Justice for mis-selling subprime mortgage securities, about half the amount the regulator had initially sought. Credit Suisse agreed to pay $5.2 billion to resolve claims. But Barclays rejected a settlement, prompting the department to file a lawsuit.

Ford made a U-turn when it scrapped plans for a new factory in Mexico to build compact cars and diverted some of the investment to a plant near Detroit to produce electric vehicles. Ford stressed that this was a commercial decision. Donald Trump had criticized the proposed Mexican factory.

Odebrecht, a Brazilian construction company, and Braskem, a petrochemical firm in which it owns a stake, pleaded guilty to bribing officials and political parties to win contracts in Latin America and Africa. The companies agreed to pay at least $3.5 billion, the largest settlement ever in a global bribery case.

Global politics by the Economist

New Year's Eve attack kills 39 in Turkey

A gunman attacked a nightclub in Istanbul during New Year's Day festivities, killing at least 39 people. Islamic State in Iraq and the Levant claimed responsibility. Turkish religious authorities who had criticized new year's celebrations as un-Islamic condemned the attack. It came two weeks after a policeman shouting "Don't forget Aleppo!" fatally shot the Russian ambassador to Turkey.

Relations between Israel and the U.S. became strained when John Kerry, the soon-to-retire secretary of state, said that the Israeli government was undermining the prospects for a "two-state solution" with the Palestinians. His comments came soon after the United States abstained in the U.N. Security Council vote that criticized Israel's construction of settlements.

Politicians in the Democratic Republic of Congo struck a deal in which elections will be organized in 2017 and President Joseph Kabila will step down by the end of the year. Kabila himself has not signed the deal, however.

Argentina's president, Mauricio Macri, dismissed the finance and treasury minister, Alfonso Prat-Gay, over an apparent disagreement over the structure of the economic team. Macri split the finance ministry into two. Luis Caputo, the new finance minister, will be responsible for borrowing. A new treasury minister, Nicolás Dujovne, will oversee tax and spending.

U.S. House Speaker Paul Ryan said that Congress was not going to raise tariffs, portending what may be one of his biggest fights with President-elect Donald Trump.

Luis Videgaray was rehabilitated in Mexico's government by being appointed foreign minister. Videgaray resigned as finance minister after suggesting that Donald Trump visit Mexico last year, a hugely unpopular move at the time.

Japan's prime minister, Shinzo Abe, paid his first visit to the U.S. naval base at Pearl Harbor, above. He expressed "sincere and everlasting condolences" to those who died in Japan's attack on it 75 years ago. Soon after, however, his defense minister, Tomomi Inada, paid a visit to Yasukuni Shrine in Tokyo where Japanese war criminals are honored among the war dead.

The British government appointed Sir Tim Barrow, a former ambassador to Russia, as its new ambassador to the E.U., three months before it is due to trigger negotiations over Brexit. This followed the early exit of Sir Ivan Rogers from the job. His resignation note decried "muddled thinking" by ministers.