What a year it has been. Who thought the pandemic would still be with us at this point? Well, at least we were hoping it wouldn’t. We did get some fiscal spending, but not as much as the President and perhaps the markets were expecting. We got plenty of inflation, more than we have seen in decades. And now we have a Federal Reserve that is transitioning from a dovish stance to a hawkish one. Oh, and by the way, the stock market averages had a great year. That’s right, stocks pushed to record high after record high throughout the year. No, not all stocks did well. Some of last year’s high flying stay-at-home names crumbled this year (see Peloton down 76% for the year or Zoom down 45% for the year as examples). The leaders this year, and have been for years were the big growth names. You know the players- Apple, Microsoft, Google etc. They now represent a huge portion of the indexes and thus have a major affect on the price of the market averages. The reopen trade was a winner early in the year (economically sensitive value names doing well), but fizzled in the second half when Delta and Omicron appeared. Nevertheless, overall, a good year is a good year for stocks.
As for today’s final trading session, by the close the Dow Jones Industrial Average was down 59 points to finish the day at 36,338. The S&P 500 was down 12 points to close at 4,766. The Nasdaq Composite Index was down 96 points to close at 15,644. Gold was up $15 to trade at $1,829 per ounce, while oil was down $1.55 to trade at $75.44 per barrel WTI. Remember when oil traded well below $0 back in 2020?
As mentioned, it was a good year for oil. Bonds had a strange year with interest rates rising during the first half of the year, but falling back some in the second half of the year. As measured by the Vanguard Total Bond Market Index ETF bond investors lost a little bit of ground for the year when all was said and done. But, in the end stocks were the star of 2021. We’ll discuss further in the January outlook piece.
In the meantime, Happy New Year from all of us at CHJ!!!