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Monday, December 09, 2019 {{ new Date().getDay() }}

Tag: stock market rise

Why Are Americans Feeling So Bad About A Good Economy?

The U.S. economy is doing its best impression of a Formula One car, racing at high speed while negotiating a series of twists and turns. Last year, real gross domestic product grew faster than any year since 1984, when President Ronald Reagan was running for reelection on the theme, "It's morning in America."

One indicator after another suggests an economy enjoying robust health. Last week, economists were pleasantly surprised when the Bureau of Labor Statistics reported that in January, the economy added 467,000 jobs — despite omicron, which spread across the country with alarming rapidity.

Unemployment remained low at four percent, compared with 6.4% a year before. A record number of people quit their jobs in November, reflecting their confidence that in today's labor market, they can find better ones.

The stock market is up more than 12 percent over the past 12 months. Corporate profits reached a 70-year high in 2021. Federal tax revenues soared by 18 percent in the 2021 fiscal year, as more people made more money.

But ... there's always a "but." As the columnist George Will postulated years ago, all news is economic news, and economic news is always bad. The dominant news in recent months has been inflation, once thought to be permanently vanquished but now making a comeback.

Prices climbed by seven percent last year, the biggest increase since 1982. A recent CNN poll found that 80 percent of Americans regard rising prices as a major problem, and 63 percent think the national economy is in poor shape.

That notion is at odds with reality. In April 2020, when the economy was suffering a pandemic-induced collapse, CNN found, 60% of Americans thought the economy was in bad shape. That the number is higher now than it was then is a testament to the power of negative thinking.

Where does the negative thinking come from? Maybe from the psychological phenomenon known as loss aversion. As Investopedia explains, some research suggests that "the pain of losing is psychologically about twice as powerful as the joy we experience when winning."

Since the pandemic crushed the economy, we have regained nearly 24 million jobs, and growth has rebounded strongly. But those gains get discounted because of what we have lost: stable prices. The joy of a boom doesn't compare to the misery of inflation.

Politics plays a role. Most of the people who voted for Donald Trump in 2020 are not inclined to cheer the state of the economy, because they don't want to think that Joe Biden has done well at managing it. They feel vindicated by every unfavorable development. They bring to mind country artist Patty Loveless, who sang, "You can feel bad if it makes you feel better."

Biden hardly deserves all or even most of the credit for our improving fortunes. The economy is an unpredictable beast over which Washington has only limited control. But he did push through a $1.9 trillion COVID-19 relief package last spring, despite warnings that it could overheat the economy and spark inflation.

Those warnings turned out to be valid. But if you're going to blame Biden's spending for the rise in inflation, you have to give credit to Biden's spending for the surge in economic growth. The outlays served to boost overall demand, which produced both results. Without the relief package, we'd have lower prices but slower growth and higher unemployment.

Much of the gloom about the economy stems from the disruptions caused by the pandemic. Some are economic: snarled supply chains, shortages of some goods, canceled airline flights and other events resulting from workers being infected. But the fear of COVID-19, the obligation to wear a mask and get any number of vaccine shots, and endless uncertainty may do more damage to the national psyche.

We all yearn for a normal life that we fear will never return. And whether we are in the pro-mask, pro-vaccine group or the opposing camp, we are confronted with reminders every time we go out that the other side is an obstacle to what we want. Bitter feelings fester.

In our yearning, we forget that in what we recall as the happy times, we were grumpy. In December 2019, before the first case of COVID-19 in the U.S., Gallup found that 62 percent of Americans were "dissatisfied with the way things are going in the United States at this time."

When you're smiling, the song says, the whole world smiles with you. These days, though, you'll get more company with a scowl.

Follow Steve Chapman on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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.

S&P 500 Ends At Record High On Retail Sales Cheer

By Echo Wang

(Reuters) - The S&P 500 index closed at a record high on Monday, its fourth straight session of gains, as strong U.S. retail sales underscored economic strength and eased worries from Omicron-driven flight cancellations that hit travel stocks.

The rally is the longest since an eight-day streak that ended on November 8.

Holiday season retail sales rose 8.5 percent from November 1 to December 24, powered by an e-commerce boom, according to a Mastercard Inc. report, which helped the S&P 500 retailing index gain on the session.

Travel-related stocks, typically sensitive to coronavirus news, declined after U.S. airlines canceled about 800 more flights on Monday after nixing thousands of flights during the Christmas weekend, as Omicron cases soared.

The S&P 1500 airlines index declined. Cruise operators Norwegian Cruise Line Holdings, Royal Caribbean, and Carnival Corp all fell, leading declines on the benchmark S&P 500.

"The market is in this interesting place where we have a strong consumer, with spending up eight percent year over year. Personal consumption makes up 70 percent of our GDP, and that remains flush," said Sylvia Jablonski Kampaktsis, chief investment officer and co-founder at Defiance ETFs in New York.

"Omicron reminds us that we still exist in this corona ecosystem. And it'll probably be one of many things that we will continue talking about with this virus but the doomsday COVID scenario of 2020 feels like it's far behind us."

Monday's climb marks a fourth straight session of gains for Wall Street's main stock indexes after encouraging news last week related to the Omicron variant eased worries about the strain's economic impact.

All 11 main S&P 500 sector indexes advanced, with energy and tech leading percentage gains.

According to preliminary data, the S&P 500 gained 65.21 points, or 1.39 percent, to end at 4,791.00 points, while the Nasdaq Composite gained 216.53 points, or 1.38 percent, to 15,869.90. The Dow Jones Industrial Average rose 350.63 points, or 0.98 percent, to 36,301.19.

The Nasdaq Composite got a boost from megacap companies, including Tesla Inc, Microsoft Corp, Apple Inc and Meta Platform.

Main U.S. stock indexes are on track for a third straight yearly gain, with the benchmark S&P 500 set for its best three-year performance since 1999.

(Reporting by Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh and Anisha Sircar in Bengaluru; Editing by Uttaresh.V and Richard Chang)