Investment Review - January 2021
- Stocks continued their rise in December, but at a more modest pace than in November. For the month, the Dow rose 3.3%, the Nasdaq Composite jumped 5.7% and the S&P 500 climbed 3.8%. For the year, the three indices defied early 2020 expectations rising 7.3%, 43.6% and 16.3% respectively. Small capitalization stocks, as measured by the Russell 2000 Index had a strong year also, with an 18.4% gain. The Nasdaq Composite, heavily weighted in large technology companies blew through all forecasters’ estimations as the work-from-anywhere economy took hold of work and online shopping habits. The bull market trend, interrupted by the shortest bear market in history, stampedes on.
- In response to the pandemic stricken economy, central bankers worldwide slashed interest rates and infused liquidity sparking global equity markets to rise. Numerous global stock benchmarks rose to multiyear highs. For the year, Hang Seng China 50 rose 12.7%, MSCI India and the Japan Nikkei 225 both returned over 18%. After plunging 32% in the first 11 weeks of the year the S. Korean Kospi 200 Index finished 2020 up by 32%, ending the year at a new record.
- The cryptocurrency craze has returned in a frenzy. After starting the year at $7,350 per Bitcoin and falling to $5,350 in early March, the crypto coin ended 2020 at $28,900. In the early days of 2021 the price had broken through $40,000. Blockchain, the technology that maintains the Bitcoin transaction ledger, is in expanding stages while trustworthiness, reliability and usage are gaining traction.
Sources: Bloomberg LLC, FactSet, U.S. Department of Labor, Dow Jones
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