The Dow gained about 40 points in early trading Friday, or 0.1%. It’s up 19% this year. The Nasdaq rose 0.2% on Friday and gained more than 22% in 2021 while the S&P 500, which also rose 0.2% in early trade, is up more than 27% this year.
It’s the third consecutive year of gains for all three major indices, and each is not far from record highs. In fact, the S&P 500 has closed at an all-time high 70 times this year.
Optimism about the effectiveness of vaccines has helped get investors excited, as has the steady hand of the Federal Reserve and other central banks, which have mostly vowed to move cautiously as they look to normalize monetary policy and slowly begin raising interest rates.
The US economy fluctuated slightly in the third quarter, with growth slowing to an annual pace of just 2.3%. However, consumer spending remains relatively strong and the overheating housing market continues to be a bright spot for the economy.
But investors will be watching the Fed closely in 2022.
Traders are currently pricing in a more than 50% probability that the Fed will raise interest rates for the first time since 2018 at its March meeting, and Jerome Powell & Co. inflation.
Investors will also be watching Washington to see if more stimulus may come from the White House and Congress after President Biden’s plan to pass the Rebuilding Better Act hit a snag.
The market will also be watching for Covid cases to see if more companies will delay a return to business plans or will have to impose tougher restrictions such as mask and vaccine mandates.
Winners and Losers
Home Depot (HD) And Microsoft (MSFT) He led the Dow this year, with every Tier 1 stock up more than 50% this year. oil companies Devon Energy (DVN) And marathon (MRO) It was the best performer in the S&P 500, which rose thanks to higher crude oil prices. Both stores more than doubled.
Top technologies like An apple (AAPL), owner of Google the alphabet (Google) And nvidia (NVDA) They were also big winners.
Biotechnology modern (mRNA)One of the manufacturers of Covid-19 vaccines, it has also boomed, gaining more than 140%. rivals Pfizer (PFE) And Biotechnology (BNTX) They rose by 60% and 215%, respectively.
Despite this, entertainment stocks were a big loser. Disney (dis) It was the largest dog in the Dow, down nearly 15% this year. The company has been affected by the increasing competition of Netflix (NFLX) and others in streaming media.
casino owners Ben National Games (the pen) And Las Vegas Sands (LVS) They are both down about 40% and lagging behind the S&P 500.
A slowdown in tourism, particularly in the Macau gaming Mecca in Asia, and the fierce battle of customers in the nascent legal sports betting market in the United States has taken a toll on casinos.