As we reach the home stretch of 2021, there is a lot to be thankful for. Stocks are having an amazing year, the economy is improving, and COVID-19 trends are going the right direction. Let’s look at some reasons to be thankful.
What an amazing year and incredible recent run in stocks. The S&P 500 Index just made 8 consecutive all-time highs for the first time since 1997 and it was up 17 out of 19 days for the first time since 1971. Along the way, the S&P 500 was up more than 25% year-to-date in the month of November, making it one of the best years ever.
The S&P 500 has made 65 new all-time highs this year, tied for the second most in any year ever (tied with 1964), with only 77 in 1995 higher. Although it is still a longshot, there’s a chance we could see 13 more new highs and break the record, something to be thankful for indeed.
“Although the economy did slow in the third quarter, it looks like that was a one-off event due to supply chain issues and the Delta variant,” explained LPL Financial Chief Market Strategist Ryan Detrick. “We fully expect growth to pick up over the coming quarters as the economy continues to rebound thanks to a very healthy and strong U.S. consumer.”
From the best services number ever, to job growth beating expectations, to inflation and supply chain issues showing signs of peaking, to consumers with trillions of dollars in savings, there are many reasons to expect the economy to remain strong as we head into 2022.
At the end of the day, though, it is all about earnings. So, while the economy might have slowed in the third quarter, earnings once again came in much better than expected, showing how agile corporate America can be. S&P 500 earnings are tracking to a 39% year-over-year increase in the third quarter, more than 12 percentage points above expectations with still more than 40 index constituents left to report. As our Earnings Season Dashboard shows below, there is a lot to be thankful for as it pertains to earnings.
Lastly, the trends in COVID-19 are going the right way, with the number of hospitalizations down more than 50% from the September peak. With booster shots on the way and kids allowed to get vaccinated, there are many tailwinds to a continuation of the reopening we’ve been seeing. This is definitely something to be thankful for.
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