Once again, the Santa Claus rally delivered its renowned bullish behaviour. A positive outlook on the corporate earnings for 2022, result in high gains during the last trading week of 2021. Moreover, enhanced research on the Omicron variant suggests that it is more transmissible, but not more ill-making. Investors seem to have gotten used to trading in a pandemic and deemed this information reassuring, as less hesitation and more rallying is reflected in the last trading week of 2021.
2021 ended with a bang for various indexes that benefited from the investor optimism. Also, their caution was reflected in the sectors of utilities, consumer staples and real-estate firms. It led to an increase of at least 9.4%. In contrast, the communication services sector fell 1.2% on Friday. In lieu of rising inflation rates, investors sold their government bonds which caused the benchmark on the 10-Year Treasury note to increase by 0.583 percentage point. The increase to 1.496% is the largest one-year yield gain in nearly ten years.
Moreover, the benchmark in global oil markets (Brent crude futures) fell from its highest price level recorded in years due to the Omicron variant affecting demand. On Friday, it declined 2.2%, but for 2021, it is up 50%.
On Wednesday, the energy, financials, technology, travel AND communication service sectors within the S&P 500 fell quite hard as Omicron continued to cause uncertainty. Yet, the S&P 500 rose a total of 27% in 2021. The Dow Jones Industrial Average gained 18.73% and the Nasdaq 21.39%. These gains perpetuate both indexes’ winning streak of three years.
The optimism was not limited to the U.S.A.. The trading week also led to gains for the AEX index, as it gained 27% this anum. The Stoxx Europe 600 did not follow far behind with its gain of 22.6%. Additionally, the FTSE 100 had its best year since 2016, as it gained 14.6% over 2021.
The crypto-currency’s superstar Bitcoin reached headlines on Tuesday, but not for the right reasons. Bitcoin had its worst month since May as it dropped under the $50k mark and finished December with a 19% loss. Furthermore, the companies who benefited from sky-high IPO prices while going public in the U.S. at the beginning of 2021, will find those shares to be trading at 9% below the IPO price.
I want to wish all of you a happy new year. Despite the possibly more constricted celebrations I hope all of you had a great time celebrating the beginning of a new year. One group that did not have fun last week was Andromeda. I would think that your new year's resolution would not be to drop 26 places and make a loss of 10.62% in a week but then again we all have different wishes. Other bombs in the last week were Primus, Floryn Traders and K2 Capital but they were already doing quite terrible so they couldn’t really drop much further. On a merrier note, we have a new leader in Omega Investments; They dropped Fides from the first place with a weekly return of 2.53%. It is a very close race to the finish with the 4 leaders within close to half of a percent from each other. Only three days to go!!