S&P 500's Record-Breaking Year Concludes with a Four-Day Loss

The S&P 500 index has reached new heights in 2024, setting numerous records throughout the year. However, as 2024 came to a close, it faced a downturn, experiencing a four-day slump.

Achievements in 2024: The S&P 500 achieved a remarkable feat, hitting 57 all-time highs and boasting over 20% returns for two consecutive years. Its two-year growth of 53.2% marks the highest increase observed since the years 1997-1998.

Despite these achievements, the S&P 500's year-end performance showed a streak of four consecutive losing days, the longest since 1966, which recorded five down days. Historically, after such downturns, the following month often brings positive returns.

Notably, if the index ends the year on a negative note today, it will indeed mark four consecutive days of losses.

This current performance mirrors the longest losing streak at year-end since 1966. For perspective, after that year, the stock market bounced back, delivering gains of 20% in 1967.

Market strategist Ryan Detrick noted that for instances in the past century where the S&P closed lower on the last three days of the year, the average returns in the following month were approximately 6.24%.

Economic Impact: The U.S. stock market has reached a staggering valuation of nearly $63.8 trillion. This substantial growth indicates that the market capitalization has doubled in just 4.5 years. Per data from The Kobeissi Letter, this past year added over $10 trillion in value to the market.

Further illustrating the significance of this, the combined market caps of China, Hong Kong, and Europe account for approximately 50% less than that of the U.S. Additionally, the ‘magnificent seven’ tech giants hold a market cap greater than that of the entire European market.

In terms of performance, Bitcoin (BTC/USD), U.S. stocks, and gold saw excellent returns in 2024, while oil and U.S. bonds did not fare well, showing only flat returns this year. The standout performers included the SPDR S&P 500 ETF Trust (SPY), which increased by 24%, and the Invesco QQQ Trust ETF (QQQ), which rose by 26.99%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) marked a gain of 12.84%, while the iShares Russell 2000 ETF (IWM) returned 10.75% during the same timeframe.

As we step into the new year, the focus remains on how the S&P 500 will recover from this four-day slump. Historical trends suggest that positive movements may be just around the corner.

S&P, Stocks, Market