US stocks

On the final trading day of 2021, the US stock market experienced a relatively quiet session. However, the communication services and technology sectors witnessed a decline, while the major US stock indexes ended the year on a positive note, with the S&P 500 Index rising by more than 28% and setting a new closing high of 70 times.

Looking back at the past year, several key factors contributed to the robust performance of the US stock market. These include the launch of COVID-19 vaccines, the Federal Reserve’s decision to maintain near-zero interest rates, and a series of bills passed by US President Biden and Congress to address the economic weakness caused by the pandemic. Additionally, the retail army played a significant role, driving the growth of meme stocks and attracting a large number of investors.

The S&P 500 Index’s 28% gain in 2021 marked its third consecutive year of double-digit annual returns, making it the best record since 1999. The Dow Jones and Nasdaq also performed well, with annual gains of 20.23% and 23.20%, respectively. All 11 major sectors of the S&P 500 Index achieved double-digit growth, with the energy sector being the biggest winner, led by Devon Energy’s 182.85% annual growth rate.

Notably, some large-cap stocks drove the US market’s growth in 2021. Microsoft and Tesla rose by more than 44%, while Apple gained over 37%. The year also saw the COVID-19 pandemic continue to spread globally, with the number of confirmed cases surging to a record high. However, the approval of Pfizer’s new crown oral drug Paxlovid by the UK and the easing of restrictions in South Africa offered some positive news.

Performance of the four major US stock indexes on Friday:

• The Dow Jones Index declined by 59.78 points, or 0.16%, to close at 36,338.3 points.
• The Nasdaq Index dropped by 96.59 points, or 0.61%, to close at 15,644.97 points.
• The S&P 500 Index fell by 12.55 points, or 0.26%, to close at 4,766.18 points.
• The Philadelphia Semiconductor Index decreased by 5.9 points, or 0.15%, to close at 3,946.2 points.

Key Stocks

The five technology giants experienced a decline. Apple (AAPL-US) fell 0.35%, while Meta (formerly Facebook) (FB-US) dropped 2.33%. Alphabet (GOOGL-US) declined by 0.92%, Amazon (AMZN-US) decreased by 1.14%, and Microsoft (MSFT-US) fell by 0.88%.

Dow Jones constituent stocks witnessed a decline. Goldman Sachs (GS-US) fell 0.77%, Jiaosheng (JNJ-US) dropped 0.72%, Boeing (BA-US) decreased by 0.69%, and Disney (DIS-US) fell by 0.67%. Home Depot (HD-US) rose by 1.24%.

Semiconductor stocks were mixed. AMD (AMD-US) fell 0.86%, while NVIDIA (NVDA-US) dropped 0.59%. Intel (INTC-US) decreased by 0.46%, Micron (MU-US) fell by 0.68%, and Qualcomm (QCOM-US) rose by 0.077%. Applied Materials (AMAT-US) fell by 0.39%.

Taiwan stock ADRs were also mixed. TSMC ADR (TSM-US) fell 0.09%, ASE ADR (ASX-US) rose 0.64%, UMC ADR (UMC-US) rose 0.52%, and Chunghwa Telecom ADR (CHT-US) fell by 0.07%.

Company News

Pfizer (PFE-US) rose 1.11% to $59.05 per share, representing an annual increase of 60.42%. The company’s first oral drug for COVID-19, Paxlovid, was approved by the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) on Friday. The MHRA recommends that patients use the drug within five days of the onset of symptoms for optimal results.

Tesla (TSLA-US) fell 1.27% to $1,056.78 per share, representing an annual increase of 44.81%. Deutsche Bank released a report on Friday, raising Tesla’s target price from $1,000 to $1,200 and reiterating its “Buy” rating. The report highlighted Tesla’s development trajectory in battery technology, capacity, and cost, which may accelerate the global shift to electric vehicles and expand Tesla’s lead in the electric vehicle market.

Wall Street Analysis

The S&P 500 Index closed at 4,766 points for the year, surpassing the average analyst target price of 4,074 points at the beginning of the year. The energy and real estate sectors were the top performers among the S&P sectors.

According to Refinitiv data, the year-to-date financial reports of S&P 500 constituent companies have exceeded analysts’ expectations, with annual profits increasing by 52.8%, 96.3%, and 42.6% in the first three quarters, respectively. Wall Street estimates that profit growth in the fourth quarter will reach 22.3%.

Ryan Detrick, chief market strategist at LPL Financial, noted, “The most significant aspect for us this year has been the resilience of American companies. Despite uncertainty and inflation, American companies have performed remarkably well, with 45% profit growth leaving a lasting impression on the market.”

Deutsche Bank US economist Brett Ryan stated, “One key takeaway from this year is that the US economy has proven to be resilient in the face of pandemic-related challenges. While risks such as Omicron and fiscal uncertainty exist, the economy will continue to expand at a faster-than-expected rate even if these risks materialize.”

As the market looks ahead to 2022, several risk challenges are on the horizon, including US inflation, the Federal Reserve’s interest rate hike, and the impact of variant viruses. Sean Markowicz, a strategist at Schroder Investment Management, commented, “This year has been a year of economic recovery. As the large-scale fiscal stimulus to address the pandemic subsides, economic growth will slow down in 2022.”

The figures are updated before the deadline; please follow the actual quotation.