Friday December 31st


Stock futures dip ahead of the final trading session of 2021

U.S. stock index futures dipped Friday morning as traders get set to close out a stellar 2021. Futures tied to the Dow Jones Industrial Average dipped about 60 points, or 0.2%. S&P 500 were marginally lower and Nasdaq 100 futures traded near the flatline. This year’s gains came as the global economy began its recovery from the 2020 Covid lockdowns, while the Federal Reserve maintained supportive measures first implemented at the onset of the pandemic. “2021 was another exceptional year for U.S. equity markets,” Wells Fargo Investment Institute’s Chris Haverland said in a note. “The markets were supported by encouraging news on the pandemic and highly accommodative fiscal and monetary policies.” Strong corporate earnings also boosted U.S. stocks, Haverland said. The estimated year-over-year earnings growth rate for 2021 is 45.1%, which would mark the highest annual earnings growth rate for the index since 2008, according to FactSet. “The economic and earnings rebound that started in 2020 carried over into 2021, lifting equity markets to record highs. While returns in 2020 were driven by price-to-earnings multiple expansion, returns in 2021 were driven by earnings growth,” Haverland said. Entering Friday’s session, the S&P 500 was up 27.2% year to date. That puts the market benchmark on track for its third straight annual gain. Energy and real estate have been the best-performing sectors in the S&P 500 this year, surging more than 40% each. Tech and financials are also up more than 30%. The 30-stock Dow was up 18.9% through Thursday’s close, also putting it on pace for its third consecutive yearly gain. Home Depot and Microsoft have led the Dow gains, rising more than 50% each. The tech-focused Nasdaq has risen 22.1% this year, putting the composite on track for its ninth annual gain in 10 years. Names like Alphabet, Apple, Meta Platforms and Tesla have led Nasdaq’s gains this year. Many investors and strategists expect tougher conditions next year as the Fed tapers off its pandemic-era easy monetary policy and addresses persistent inflation. “It’s going to be tougher, I think, in the second half of 2022. Still, I think you’re going to have enough market for stocks next year,” Wharton finance professor and long-time market bull Jeremy Siegel said Friday on CNBC’s “Squawk Box.” Hong Kong stocks led gains among major Asia-Pacific markets on Friday, with Chinese tech stocks in the city soaring. Markets in Australia, Hong Kong and Singapore closed early on Friday for the final trading day of the year. Elsewhere in Asia, markets in Japan and South Korea were closed on Friday. The Hang Seng index in Hong Kong jumped 1.24% to 23,397.67, paring some losses but still tumbling about 14% for the year. The Hang Seng Tech index gained 3.57% to 5,670.96. Mainland Chinese stocks closed higher, with the Shanghai composite up 0.59% to 3,640.47 while the Shenzhen component rose 0.413% to around 14,857.35. Oil prices fell 1% on Friday but were set to post their biggest annual gains in 12 years, spurred by the global economic recovery from the Covid-19 slump and producer restraint, even as infections surged to record highs around the world. On the last day of 2021, Brent crude futures were on track to end the year up 53%, while U.S. crude futures were headed for a 57% gain, the strongest performance for the two benchmark contracts since 2009, when prices soared more than 70%. Brent crude futures fell 86 cents, or 1.1%, to $78.67 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 80 cents, or 1%, to $76.19 a barrel. Gold was set for its worst performance in six years, though prices inched up in thin trade on Friday as U.S. Treasury yields dipped, increasing the bullion’s appeal by reducing its opportunity cost. Spot gold rose 0.2% to $1,818.43 per ounce by 0119 GMT, hovering close to a one-month high hit on Dec. 28. U.S. gold futures were up 0.2% at $1,818.00.