Charts of the Year

Charts of the Year

January 03, 2022

In today’s blog, we will take a look at some of the best charts and tables we shared all year.

There are so many charts and tables that sum up how special 2021 was, but at the end of the day the fact that 2021 had the second most all-time highs ever probably tells the story better than nearly any other.

Not to be outdone, this year will go down as one of the best ever for the bulls.

Many would consider 2021 to be a volatile year for stocks, but the S&P 500 Index only had one 5% pullback all year and that was during the Evergrande worries in September/October.

Here’s putting the 5.2% peak to trough pullback in perspective.

This was the fasted bull market to ever double and it set the record by a wide margin.

Every single month made a new all-time high (12 for 12), matching 2014 as the only years to accomplish this incredible feat.

Were there signs the bull market would be this strong? “Although many were caught flatfooted by the strong equity returns this year, there were numerous clues,” explained LPL Financial Chief Market Strategist Ryan Detrick. “The huge end of year rally in 2020 was the first clue. Add in a strong first five days, a strong first quarter, the S&P 500 holding above the December lows in the first quarter, and right there you had several signals early in the year that strong returns were quite possible in 2021.”

Let’s get to some of the charts and tables we shared earlier this year that signaled the possibility of big returns in 2021.

The huge end of year rally was a good sign for 2020, as when the final two months gain more than 10% (like 2020), then the following year has never been lower.

The strong first five days suggested much higher than average returns.

When stocks were up more than 4% year to date by Valentine’s Day, the rest of the year tended to do well.

The big first quarter for stocks said better times were ahead.

The December Indicator was another big clue 2021 would be special. This indicator signals potential for a strong year when the first quarter low doesn’t violate the December low, like we saw this year.

A strong first 100 days of the year for stocks boded well for the rest of the year.

The S&P 500 had a 7-month win streak end in September, but the returns after such long win streaks only added to the bulls’ resume.

Things looked good for a strong fourth quarter, as the S&P 500 was up 6 quarters in a row heading into it, which historically was good for the bulls.

After a negative November when stocks are up more than 20% for the year, the usually bullish December actually does better. Well, stocks are up close to 5% this final month of the year, so this played out nicely yet again.

Those were all clues 2021 was going to be strong. Now let’s look at charts and tables we’d classify as interesting.

The Dow hit six 1,000 point milestones in 2021, the most for any one year ever.

We’ve heard a lot about how higher rates were bad for stocks, but history says that simply isn’t true.

Turns out, the first rate hike isn’t all that bad either. We haven’t even seen the first rate hike yet, but it is coming, so don’t get overly worried just yet.

Taking things a step further, stocks have historically done great the year before the first hike in a cycle, gaining the past nine cycles by an average of 15% heading into that first hike. Not so scary at all.

Stocks did great under President Biden, with his first 100 days in office ranking as one of the best ever.

What about 2022? Here are some charts and tables that suggest this bull market still has time left.

The big gains this year may be a good sign for 2022, as the past nine times the S&P 500 was up at least 20% it was higher the following year. Not to mention, the following year has been up 11.5% on average, a better than average return. Remember that 11.5% number….

Mid-cycle years are higher 80% of the time and up an average of 11.5%. Stocks may not gain 20% next year, but we may still see a solid return.

Now let’s end with some fun. These are signals that we would never suggest investing in, but they all indeed have turned out to be correct.

Turns out Zodiac signs can be worth watching, as the year of the Ox has been strong for stocks. This sure played out in 2021.

Don’t ever invest in this, but the Super Bowl Indicator suggested the Bucs winning was a good sign, as NFC wins have meant better stock returns.

Tom Brady in the Super Bowl hasn’t always been good for stocks, but when he wins, they do better. The Bucs winning didn’t hurt things.

In fact, when the Bucs have won the big game, that’s been the best out of all 20 teams to win a Super Bowl.

Golfer Phil Mickelson won a major in 2021, which has been good for stocks historically. This proves everyone likes Lefty.

We don’t know what 2022 will bring, but we can tell you that as the market sends signals, LPL Research will continue to try to capture them for you in our daily blog. We wish all our readers a Happy New Year and many happy returns in 2022.



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All index and market data from FactSet and MarketWatch.

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