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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