Equities Rebound Despite Inflation

All three indexes finished higher in December with the S&P 500 up 4.5% and the Dow up 5.5% outperforming the tech-heavy Nasdaq up 0.8%. For 2021, the S&P 500 rose 26.9%, notching a three-year winning streak, while the Dow and Nasdaq gained 18.7% and 21.4%, respectively. Energy and real estate were the best-performing sectors in the S&P 500 in 2021, both surging more than 40%, followed by tech and financials, each rising more than 30%.

Omicron Shocks, Inflation Persists

Pausing the 2021 uptrend, the S&P 500 recorded a mild negative 0.73% return while the Dow Jones Industrial Average experienced a loss of 3.5%. In contrast, the Nasdaq continued with a significant positive return at 1.9%. More notable intra-month was the sudden emerging concern of the new Covid variant Omicron, which negatively impacted the stock market on November 26.

Constructive Outlook, Stagflation Concerns Overblown

Evergrande, Interest Rate and Equity Prospects

China’s Market Volatility, Delta Variant, Modest Risk

Peaking Momentum, Continuing Solid Growth 

Cautiously Bullish Outlook Despite Fed Hawkish Surprise

Things Are Looking Brighter

For the month of May, stocks posted mixed results in a relatively volatile month of trading with the Dow and the S&P 500 gaining 1.9% and 0.6%, respectively, while tech-heavy Nasdaq, however, suffered a 1.5% loss.  Leadership in the S&P 500 has been cyclical in May with energy and financials being the top performing sectors, returning 5.8% and 4.8% respectively. Consumer discretionary and technology sectors both lost grounds, posting negative returns of -3.8% and -0.9% respectively.

Still Recovering but on Watch

Economic Recovery and Equity Rotation