Stocks Positive in Final Week: All Markets up Over 20% For the Year

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!

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