Wall Street edged lower in light trading on Friday, with investors taking a breather as they prepared to ring in the new year and close the books on 2021, marking the second year of recovery from a global pandemic.
All three major U.S. stock indexes are set for weekly, monthly, quarterly, and annual gains, achieving their biggest three-year advance since 1999, Reuters reports. The S&P 500 is on course for a 27% increase since the last trading day of 2020. Through Thursday, the benchmark index has registered 70 record-high closes, the second-most ever. Using Refinitiv data back to 1928, the most SPX record-high closes in a single year was 77 in 1995.
Earnings results from S&P 500 companies blew past analyst estimates to deliver year-on-year growth in the first three quarters of the year of 52.8%, 96.3%, and 42.6%, respectively, according to Refinitiv, which currently sees fourth-quarter annual earnings growth of 22.3%.
This year, Dems got a $1.9T relief plan, 72% of Americans vaccinated, a $1T infrastructure bill, 40 Biden judges, record high stock market, 4.2% unemployment, jobless claims at a 50-year low… but it's also what we were able to AVOID by virtue of Republicans being out of power. pic.twitter.com/C5u0rukXOT
— Brian Tyler Cohen (@briantylercohen) December 31, 2021
Companies, consumers, and the broader economy largely thrived in 2021 amid a constantly shifting landscape, including a tumultuous transfer of Presidential power marked by the January 6th Capitol riot. Other factors included the “meme stock” phenomenon, new COVID-19 variants, a labor shortage, generous fiscal/monetary stimulus, hobbled supply chains, booming demand, and the resulting price spikes.
Competent leadership makes a HUGE difference
Under @POTUS we have
The lowest unemployment claims in over 60 years
GDP growth of +5.5% in 2021 (vs -3.49% in 2020)
Record stock market
Lower gas prices
— Adam Cohen Lawyers for Good Government #DemCast (@axidentaliberal) December 30, 2021
Energy, real estate, and microchips–all sectors associated with economic recovery and booming demand–were among 2021’s top performers, with growth stocks handily outperforming value stocks.
The total US stock market has officially closed up +25.75% on the year
That's one big bad bull, folks 🐂 pic.twitter.com/xpuP852Trs
— Grayson Roze (@GraysonRoze) December 31, 2021
The COVID-19 pandemic, which burst onto the scene in early 2020 and prompted the steepest, quickest economic contraction in history, continues to linger, pressuring travel-related stocks. Market-leading tech and tech-adjacent mega-cap stocks, which outperformed the broader market in the first year of the global health crisis, lagged as the economy slowly reopened and vaccines were deployed.
This chart from @fundstrat is pretty amazing. Stock market bottoms in the pandemic timed up ahead of peaks in COVID hospitalizations:
– 4 prior COVID waves
– S&P 500 bottomed 12 days ahead of hospitalization peak at the median
– Extending that model, S&P 500 has already bottomed pic.twitter.com/QOxI1bvwFU
— ZackGuzmán.eth (🎄,🎄) (@zGuz) December 28, 2021
Early data suggests the Omicron variant, which has caused an abrupt spike in global infections of the disease, is less virulent than its predecessors read more, and economic data is increasingly suggesting a return to normal, two years after the first cases of COVID-19 were reported.
.@JoeBiden's 1st Year Economic Performance Has PROVEN Unbeatable & Better Than ANY President In 50 Years.
— Wisdom Rocks (@GetWisdomDude) December 31, 2021