Economic Update 2022Stock Markets had another stellar year in 2021- While the world did not return to normal from the full effects of the pandemic it did came a long way from the complete shutdown
Jan 4 2022 38376 2
Dated: January 4 2022
Economic Update 2022
Stock Markets had another stellar year in 2021- While the world did not return to normal from the full effects of the pandemic it did came a long way from the complete shutdown in 2020. A full economic reopening of trillions of dollars in stimulus and historically low interest rates buoyed stocks to record levels. For example, the S&P hit 70 record highs this year marking the most record high closings in 25 years! At the same time COVID-19 cases had two surges during the year, the world suffered a supply shortage due to factory closings during the pandemic, there was a labor shortage as the labor participation rate (the number of working age people working or looking for work) dropped to historic low levels, and inflation rose to the highest levels since 1982. After many years of historic rises in stock prices, we will see if inflation and higher interest rates impact stock markets in 2022 or if we have another year of dramatic gains.The Dow Jones Industrial Average ended the year at 36,338.30, up 18.7%from 30,606.48 at the close of 2020.The S&P 500 closed the year at 4,766.18, up 26.9%from 3,756.07 at the end of 2020.The NASDAQ closed at 15,644.97, up 21.4%from 12,888.28 on December 31, 2020.
U.S. Treasury Bond Yields rise to pre-pandemic levels in 2021 - The 10-year U.S. treasury bond yieldclosed the year at a1.52%, upfrom 0.93% On December 31, 2020.The 30-year treasury yieldended the year at1.90%, upfrom 1.65% on Dec. 31, 2020.
Mortgage Rates finished the year higher than the all-time low levels due to the pandemic but still near historic low levels - The December 30, 2021 Freddie Mac Primary Mortgage Surveyreported thatthe 30 year-fixed rate mortgage average was 3.11%, upfrom 2.67% on December 28, 2020.The 15-year fixed was 2.33%, upfrom 2.17% last December. The5-year ARM was 2.41%, downfrom 2.71% at the close of 2020.
For the month ending December 31, 2021
The Dow Jones Industrial Average closed the month at 36,338.30, up 5.4% from34,483.72 at the end of September. It is up 12.7% year-to-date.The S&P 500 closed the month at 4,766.18, down 4.4%from 4,567.00 last month. It is up 21.6% year-to-date.The Nasdaq closed the month at 15,644.97, up 2.1%from 15,537.69 last month. It is up 20.6% year-to-date.
U.S. Treasury bond yields - The 10-year treasury bond closed the month yielding 1.52%,up from 1.43% last month.The 30-year treasury bond yield ended the month at 1.90%, upfrom 1.78% last month. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates - The December 30, 2021, Freddie Mac Primary Mortgage Surveyreported mortgage rates for the most popular loan products as follows:The 30-year fixed mortgage rate was 3.11%, almost unchangedfrom 3.10% last month.The 15-year fixed was 2.33%, downfrom 2.42% last month.The 5-year ARM was 2.41%, downfrom 2.47% last month.
U.S. employers added 210,000 jobs in November - The Department of Labor and Staticsreported that210,000new jobs were added in November. It was the fewest monthly number of jobs added this year and less than half of the 500,000 new jobs economists' expected. Average hourlywages rose 4.8% year-over-year.Thelabor-force participation rate(the share of workers with a job or actively looking for a job) increased two tenths of one percent from October's level to61.8%. It remains sharply below the 63.6% level before the pandemic. Theunemployment rate was 4.2% in November, downfrom 6.7% in November of 2020. The December unemployment report will be released on Friday January 7, 2022.
U.S. Existing-home sales jump again in November - The National Association of Realtors.