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Tag: biden economy

Wall Street Ends Tumultuous Year Near Record Highs

By Stephen Culp and Echo Wang

NEW YORK (Reuters) - Wall Street closed near record highs in light trading on Friday, the last trading day of 2021, marking the second year of recovery from a global pandemic.

All three major U.S. stock indexes scored monthly, quarterly and annual gains, notching their biggest three-year advance since 1999.

The S&P 500 gained 27 percent since the last trading day of 2020. Through Thursday, the benchmark index has registered 70 record-high closes, or the second-most ever. Using Refinitiv data back to 1928, the most record-high closes for the S&P 500 in a single year was 77 in 1995.

The Dow added 18.73 percent for the year, and the Nasdaq gained 21.4 percent.

Companies, consumers and the broader economy largely thrived in 2021 as they felt their way forward amid a constantly shifting landscape including a tumultuous transfer of power marked by the Jan. 6 Capitol riot. Other factors included the "meme stock" phenomenon, new COVID-19 variants, a labor shortage, generous fiscal/monetary stimulus, hobbled supply chains, booming demand and the resulting price spikes.

"What stands out to us this year among all the negatives, is the resiliency of Corporate America," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "In a sea of uncertainty and higher prices, you have to be extremely impressed by how agile and adaptive Corporate America was to sport 45% earnings growth in a very difficult year."

Indeed, earnings results from S&P 500 companies blew past analyst estimates to deliver year-on-year growth in the first three quarters of the year of 52.8 percent, 96.3 percent, and 42.6 percent, respectively, according to Refinitiv, which currently sees fourth-quarter annual earnings growth of 22.3 percent.

Energy <.SPNY>, real estate <.SPLRCR> and microchips <.SOX>, sectors associated with economic recovery and booming demand, were among 2021's top performers, with growth stocks' <.IGX> 31% advance handily outperforming the 22% gain in value <.IVX> stocks.

Market-leading tech and tech-adjacent megacap stocks, which outperformed the broader market in the first year of the global health crisis, were laggards as the economy slowly reopened and vaccines were deployed.

The NYSE FANG+ index <.NYFANG>, an equal-weighted group of 10 such stocks, notched a nearly 20 percent advance on the year. Google parent Alphabet Inc <GOOGL.O> posted the biggest annual advance among NYSE FANG+ constituents, enjoying its best year since 2009. [nL4N2TG1PT]

Dow Transports <.DJT>, considered by many a barometer of economic health, registered a yearly gain of more than 31 percent.

Steadily rising Treasury yields - along with a recent hawkish shift from the Federal Reserve, which now foresees as many as three rate hikes in the coming year - have supported interest rate-sensitive financials <.SPSY> which gained nearly 33 percent.

The COVID-19 pandemic, which burst onto the scene in early 2020 and prompted the steepest, quickest economic contraction in history, continues to linger, pressuring travel-related stocks.

The S&P 1500 Airlines index <.SPCOMAIR> ended 2021 as one of the year's few losing sectors with an annual decline of nearly 2%.

But early data suggests the Omicron variant, which has caused an abrupt spike in global infections, is less virulent than its predecessors and economic data is increasingly suggesting a return to normal, two years after the first cases of COVID-19 were reported.

The Dow Jones Industrial Average <.DJI> fell 59.78 points, or 0.16 percent, to 36,338.3, the S&P 500 <.SPX> lost 12.55 points, or 0.26 percent, to 4,766.18 and the Nasdaq Composite <.IXIC> dropped 96.59 points, or 0.61 percent, to 15,644.97.

Volume on U.S. exchanges was 7.6 billion shares, compared with the 10.55 billion average for the full session over the last 20 trading days.

Of the 11 major sectors in the S&P 500, consumer staples sector <.SPLRCS> was up the most in Friday's session, with communications services <.SPLRCL> suffering the biggest percentage drop.

Advancing issues outnumbered declining ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored decliners.

The S&P 500 posted 47 new 52-week highs and no new lows; the Nasdaq Composite recorded 58 new highs and 143 new lows.

((Reporting by Stephen Culp in New York and Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh in Bangalore; Editing by Matthew Lewis and Lisa Shumaker))

Wall Street Slips On New Year's Eve As Market Clocks Robust 2021 Gains

(Reuters) - Wall Street's main indexes were subdued at open on Friday, looking to clock a third straight annual gain in a year fueled by massive stimulus, COVID-19 vaccine rollouts, and a strong retail participation.

The Dow Jones Industrial Average fell 12.23 points, or 0.03 percent, at the open to 36,385.85.

The S&P 500 opened lower by 3.52 points, or 0.07 percent, at 4,775.21, while the Nasdaq Composite dropped 18.66 points, or 0.12 percent, to 15,722.91 at the opening bell.

(Reporting by Medha Singh in Bengaluru; editing by Uttaresh.V)

Don't Look Now, But The Biden Economy Just Happens To Be Glorious

If Joe Biden takes office, there'll be a "depression the likes of which you've never seen," Donald Trump warned a month before he lost the 2020 presidential election. It didn't happen.

You know that, right?

Also, your 401(k) surely did not "go to hell," as the previous guy predicted. On the contrary, stocks in the S&P 500 are up 26 percent as the first year of the Biden presidency is about to end.

How good is that? "U.S. financial markets are outperforming the world by the biggest margin in the 21st century" is how Bloomberg News put it.

The U.S. gross domestic product is expected to have grown an extraordinary 5.6 percent this year, according to economists. And that's after adjusting for inflation.

The unemployment rate is down to 4.2 percent. Retail sales in the recent Christmas shopping season rose eight percent from the same period last year — the biggest gain in 17 years.

As Bloomberg summed it up, "America's economy improved more in Joe Biden's first 12 months than any president during the past 50 years."

And so how do we explain Biden's lackluster approval ratings, weirdly depressed by discontent on how he's managing the economy? The reasons include distorted media coverage of the economy, a Republican opposition that doesn't want to give Democrats credit, and Democrats who don't want to give themselves credit (and for wholly neurotic reasons).

Now, as always, there are economic concerns. Inflation has been cutting into the good news of fattening paychecks for American workers. However, the bubbly retail numbers point to consumers with the means to spend and happy to do it. That consumer credit grew a record 27 percent in Biden's first year reflects public confidence about the future.

The supply chain blockages seem to be easing, as witnessed in the fake news of bare store shelves this shopping season. The difficulty in getting parts and products shipped from Asia has raised interest in bringing manufacturing back into this country, and that is a good thing.

The biggest driver of inflation, oil prices, could very well be headed down. "Much needed relief for tight markets is on the way," according to the International Energy Agency. The simple reason is rising oil production. Helping matters was Biden's planned release of 50 million barrels of oil from the U.S. strategic reserves, with similar steps being taken in other countries.

Why Democrats don't shout hosannas for this basically strong economy has long been a mystery. One explanation is that some of the loudest voices in the party, mainly on the left, engage in a culture of complaint. The lefties obsess angrily on what isn't being done for the poor and ignore what is.

They've been hollering at West Virginia Sen. Joe Manchin for blocking passage of the current Build Back Better plan, even though it is they who screwed it up. All hope is not lost, though. Democrats can trim their overweight wish list, thus avoiding such cheesy tricks as financing the child tax credit for just one year. Manchin does have a point.

The programs most worth saving are universal preschool, strengthening the Affordable Care Act, and fighting climate change. A plan costing $1.8. trillion — a number Manchin has reportedly said he would consider — would still be bold under any previous definition of the word.

Stock market gains do benefit the better-off, but lots of average people have some skin in the game. Sweden has more billionaires per capita than we do while maintaining a dream of a social safety net.

There's nothing wrong with prosperity. "Happy Days Are Here Again" was the campaign song for Franklin D. Roosevelt — just before he launched the New Deal.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Everything The Press Says About Biden's Economy Is Wrong

Reprinted with permission from PressRun

Want an unvarnished, unfiltered view of the U.S. economy, the kind that you're not seeing from the Beltway press today, as they push panicked inflation updates?

It's simple. Worker wages are up this year as employees enjoy unmatched leverage in the marketplace. Job gains are soaring. And companies are printing profits thanks to sky-high consumer demand —Target's sales spiked 13 percent in the last quarter and the retail giant expects double-digit gains over the holiday shopping season. That's crucial because consumer spending accounts for two-thirds of the economy. All the while, mortgage interest rates hover around 2.5 percent.

The specifics:

• The government dramatically undercounted the number of new jobs from June through September, so we now know an additional 626,000 jobs were created those months, blowing away the idea of a stymied hiring pattern nationwide. Remember the "disappointing" jobs report from August, with 235,000 jobs? It was actually 483,000 new positions. It turns out there's been a jobs explosion this entire year, and all indications are the trend will continue into 2022.

• Goldman Sachs predicts by the end of next year the U.S. unemployment rate will drop to a 50-year low, thanks to a "red-hot demand for workers." Under Trump, the rate peaked at nearly 15 percent.

• Retail sales surged 1.7 percent in the month of October, as consumers flocked online and into stores, splurging on electronics and home-improvement projects. American consumers spent $638 billion in October, a 16 percent increase from last year.

• JP Morgan upgraded its growth expectations for the economy, raising its forecast for the U.S. gross domestic product to climb five percent in the fourth quarter.

• Biden's pandemic stimulus plan has worked: "Households are sitting on a collective $2.5 trillion in savings built up during the pandemic," the New York Times reports.

It's a royal flush of economic good news.

Yes, inflation is up and it's a problem. Nobody likes spending $90 to fill up their SUV at the pump. That's why consumers say their confidence is down, even as they spend at robust rates. Inflation today is a global phenomenon, created by a once-in-a-lifetime pandemic, not Democratic fiscal policy. (It's also being driven by companies taking advantage of a chance to raise prices again and again in 2021.)

The reason inflation has sprouted in the U.S. is because consumer demand is booming as the economy has recovered from Covid faster and stronger under Biden than most people ever thought possible.

What's revealing is how the Beltway media remain overly fixated on inflation, while often turning a blind eye to all the signs of a surging economy. In other words, if it's bad news for Biden, then it's treated as Big News.

By constantly doling out sour economic updates in the form of breathless inflation coverage, the press does the GOP's handiwork. The Washington Post this week announced inflation is the "defining" challenge of Biden's presidency. Why inflation? Because the press decided.

CNN insists inflation remains a "political nightmare for Biden" and claims persistent inflation "could make historically difficult midterm elections next November even harder for Democrats by overshadowing their legislative wins." CNN doesn't think that the millions of new jobs likely created next year and a plummeting unemployment rate will have any impact on the midterm election cycle — only inflation.

Here's what's happened: For weeks this fall, the Beltway press joined forces with the GOP to tell an hysterical tale about the state of the U.S. economy. It was an alternate version of reality, where the stagnant, faltering economy was being driven to the precipice by runaway inflation, which stood poised to demolish middle-class savings across the board. All while an ineffective president stood by and watched cash-strapped households suffer.

It was doomsday nonsense actively pushed by Republicans, who are gleefully rooting against America's interests. Sen. Rick Scott (R-FL) this week told the Wall Street Journal that if inflation pushes up interest rates next year, that would be "a gold mine for us."

The press wasn't holding up a mirror to the U.S. economy. The press painted its own picture. Desperate for a dramatic angle to lure consumers back to TV news and websites, and weirdly anxious to bury Biden, the Beltway media have gone all in on the Doomsday narrative. Remember that corporate media owners benefit from tax breaks when Republicans are in office.

The panicked tale was never true. In recent days, the new data points paint a clearer picture of the economy — it's a surging one that's powering through a stunning pandemic recovery and stands poised to blast off in 2022. An unemployment rate all the way down to 3.5 percent? A stock market sitting at the once-unthinkable 45,000 mark? Both are entirely possible in the next calendar year.

Today's press coverage suggests the economy is an albatross around Biden's political neck. In reality, it's booming.

Democrats Should Be Bragging About The Markets

On March 11, President Joe Biden gave a White House address touting his administration's response to the COVID-19 crisis. As it happened, the Dow Jones Industrial Average closed at another record high the day before. But about that Biden said not a word.

Had Donald Trump still been president, the stock market would have almost certainly topped his list of glorious achievements. We'd hear popping talk about how our 401(k)s are sizzling and how he is the reason. Sample tweet from August 2017: "Stock market at an all-time high. That doesn't just happen!"

No, Biden last week spoke of "a collective suffering, a collective sacrifice, a year filled with the loss of life and the loss of living for all of us." He spent a good deal of time on the anguish, but then he moved, happily, to his administration's successes — boosting production of the Johnson & Johnson vaccine, recruiting armies to give the shots, getting the vaccines into pharmacies.

It was a relief to hear a Democratic president bragging out loud about his accomplishments. But the message must move away from pain to prosperity. Biden has started on that path by touting the massive COVID relief bill that's sending checks to an overwhelmingly supportive public. His self-praise should expand to the stock market.

Democrats seem especially reluctant to use the stock market as a measure of their economic prowess. Under Barack Obama, the Dow hit record highs 118 times. Do you remember him ever talking about it?

Biden was basically right when he said, "Where I come from in Scranton and Claymont, the people don't live off of the stock market."

It's true that the wealthiest ten percent of American families own 84 percent of Wall Street portfolios' value. The bottom 50 percent — that's half of American families — possess none or almost no equities. Last year, gains in the S&P 500 added an estimated $4 trillion to American portfolios, but $3.4 trillion of it went to the top ten percent.

Many Americans don't understand that reality, as Trump knew well. Those in the middle who own a few shares, perhaps in their retirement accounts, do feel tied to movements in stock prices. Never mind that in 2019, the median portfolio size for households in this group was only $13,000.

Non-investors, meanwhile, often associate a booming stock market with a good economy, even if they themselves are hurting.

It's odd how Democrats shy away from taking credit for bubbling markets, when, in recent decades, stock returns have done better under their presidents than Republican ones, Trump included. The Dow posted an annualized return of almost 11.8 percent under Trump, according to MarketWatch. That was good but short of Obama's 12.1 percent. And it was nowhere near Bill Clinton's 15.9 percent.

As MarketWatch also noted, even Clinton's numbers were blown away by the 25.5 percent annualized rise under Calvin Coolidge, a Republican. Of course, Coolidge had the Roaring '20s blowing wind in his economy's sails.

We're now in the 2020s. Many economists are predicting that with the virus in retreat, the economy will roar once again. The Financial Times cites such prods as pent-up demand, government spending, and savings by the locked-down Americans who kept their jobs but had few places to spend money.

The stock market is off to a hot start in Biden's first year. We won't miss tweets like Trump's "Dow hit a new intraday all-time high! I wonder whether or not the Fake News Media will so report?"

But Democrats would be wise to at least applaud politely when stock markets sing of a new age of abundance now that they're in charge.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com