The Stock Market Is Ending 2021 With a Whimper. Why That’s Oh-So Typical.

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The stock market has had a wonderful year. Looks like it will end with a whisper.

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It is difficult to tell how well the stock market has performed in 2021. The S&P 500’s 27% growth — give or take — would be the fourth-best year since 1996 and marks the third straight year of double-digit growth. It really doesn’t get any better than this.

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However, in this good year, investors are in no rush to buy the stock.,
After hitting a record high on Wednesday, the S&P 500 dropped 0.3% on Thursday, and turned little on Friday at 4780.64. If the index stays close to now, the S&P 500 will be down 0.3% in the last two days of the year.

It’s all very special. According to the folks at Bespoke Investment Group, the S&P 500 has lost an average of 0.1% over the past two trading days since 1996, with an average decline of 0.3%. The decline is just as likely when the stock market is up more than 10% for the year and 2% for the month of December in the last two days of the month, with the S&P 500 falling five out of eight times.

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“The end of the year has been a generally positive time of year for equities, with the last two trading days of December being the exception,” wrote the folks at Bespoke Investment Group. “Even in years where the S&P 500 was already up sharply … the year still ended on a down note.”

Not that it really matters. There is little correlation between how the stock market ends one year and how it performs the next. The best thing we can all do is just enjoy the new year.

Write to Ben Levison at [email protected]

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