Happy New Year! With Dec 31 landing on a weekend, it makes this Monday version unique in that I will discuss the prior week, month, quarter, and year. This week’s market recap will provide data for these time periods, as we begin preparation of a more comprehensive document that will recap 2021, and provide an outlook for 2022.
Last Week: The Dow (+1.9%) led the way in the final week of the year, with the NASDAQ (0.0%) and S&P 500 (+0.9%) also posting modest gains. Taxable and tax-free municipal bonds were flat to up fractionally.
Last Month (December): Much like the final week, December was marked by a weaker NASDAQ, as technology stocks lagged in the face of rising interest rates. The Dow (+5.4%) led the way, with the NASDAQ (+0.7%) and S&P 500 (4.4%). Taxable bonds were lower by about 0.5%, while tax-free municipal bonds were only slightly lower at -0.1%, in reaction to the rise in inflation and interest rates. Investors receiving their December monthly statements will see their portfolios rise about 1% - 3%, with the higher rates of return for more aggressive portfolios.
Last Quarter (2021 Q4): Strong months of October and December helped contribute to sizeable gains in the 4th quarter, with the Dow (+8%), NASDAQ (+9%) and S&P 500 (+11%). Inflationary pressures and rising interest rates put pressure on bonds, as taxable bonds fell about 0.5% - 1%. Conversely, increased demand for tax-free municipal bonds had them increasing by up to 1% for the quarter.
Last Year (2021): Following a surprisingly strong year of 2020 in the face of the global pandemic, last year (2021) was also an extraordinary year for the US stock markets, with all indices exceeding 20% for the year. For the sixth time ever, and the first time in 24 years, the S&P 500 surpassed both the Dow and the NASDAQ, with the Dow (+20.9%), NASDAQ (+22.2%), and S&P 500 (+28.7%). Depending on the type of taxable bonds owned, last year was roughly flat to up about 2%. Meanwhile, tax-free municipal bonds started the year off strong, and managed to gain about 4% - 7% for the year. Clients’ diversified investment portfolios grew about 5% to 15%, depending on the amount of stocks held in their portfolios.
Have a great start to your week and year!
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing