The new year has begun with a sense of positivity and hope, as investors look forward to a fresh start in 2022. The first trading session of the year saw a slight uptick in stock indexes, reflecting the general optimism surrounding the new year.
Investors are feeling upbeat about the prospects of the year ahead, particularly with expectations for progress in managing and overcoming the challenges posed by the ongoing COVID-19 pandemic. This sentiment has translated into gains across all major stock indexes: the Dow increased by 0.3%, the S&P 500 rose by 0.5%, and the Nasdaq outperformed with an impressive 0.8% gain. It’s common for stock values to rise at the beginning of a new year as investors seek new investment opportunities. However, the sustainability of these gains will depend on various factors such as inflation concerns and decisions by the Federal Reserve.
The S&P 500 ends the year up 28.7% (total return).
It has finished higher in 12 out of the last 13 years and 17 out of the last 19.
Over the last 3 years, the S&P 500 has more than doubled (+100%), its highest 3-year return since 1997-1999.
Happy New Year! pic.twitter.com/J6KxHFc1rp
— Charlie Bilello (@charliebilello) December 31, 2021
Looking ahead, experts like Brad McMillan, the chief investment officer for Commonwealth Financial Network, predict that 2022 will be a year of transition towards a more normalized economy. With ongoing hiring, increased consumer spending, business expansions, and government policy adjustments, the overall economic landscape is expected to move closer to pre-pandemic levels. The overarching theme for 2022 is a gradual shift back to a state of normalcy in various aspects of the economy.
