The shares were mixed on Thursday, the last trading day of the year. He Dow (NOT SOLD) it was flat in the morning, after finishing with a record high on Wednesday, while the widest S&P 500 (SPX) increased 0.1%. He Nasdaq Composite (COMP) fell 0.1%.
“2020 is coming to an end,” Paul Hickey, co-founder of Bespoke Investment Group, wrote in a note to clients. “Unfortunately, 2021 will start to look a lot like 2020, but hopefully by the end of the year it will look more like something better.”
Although the economy is not approaching its pre-pandemic strength, stocks are in record territory. S&P and Nasdaq hit their all-time highs on Monday. All three indices will end the year with gains. For the Nasdaq, it is shaping up to be the best year since 2009.
In early 2020, investors were worried that the market would have less wind in the queue as the Fed stopped lowering interest rates and the economic shock Trump’s tax cuts are over. In addition, the trade agreement between the United States and China was still in balance. But little did they know they were about to fall off a cliff.
After breaking record highs earlier this year, the market began to shake for fear of the coronavirus pandemic in February and deepened its sale in March as blocking measures were taken in the United States. The Dow routinely set new records for its biggest one-day one-day falls in history and the New York Stock Exchange had to suspend trading on the S&P 500 several times because the index fell too quickly.
But in the months that followed, as the economic pain of the pandemic continued, the stock market recovered faster than many expected.
“This year was a year with many reminders for investors: number one, don’t overreact,” Leo Grohowski, investment director at BNY Wealth Management, told CNN Business.
As the market receded from the heavy losses in March, investors who had panicked and withdrawn their money lost concentration.
The duration and strength of the stock market rally was one of the most amazing parts of the year for investors. People will look back this year and wonder how these market records could have been achieved in the context of an unprecedented economic hardship, said JJ Kinahan, chief strategist at TD Ameritrade.
The lesson: “Wall Street doesn’t reflect the main street,” Kinahan said. “But the other part of that is that there’s no main street bag either.”
In fact, companies that ended up gaining market share during the pandemic, such as Amazon (AMZN) i Walmart (WMT), were already huge companies before the Covid-19. Meanwhile, smaller businesses and mom and pop stores were, and still are, in a very different situation.
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