Year 2021 Wrap-Up: Santa Claus Rally Lifted the SPX Index to Record Highs

Weekly Wrap Content for the week of Dec 31:

1. Week 52 major indexes performance;

2. Week 52 US sector indexes performance;

3. Major indexes weekly charts of support and resistance levels;

4. Major indexes performance for the year 2021

U.S

Last week to wrap up the year 2021, all three major equity indexes recorded gains for the week, as a “Santa Claus rally” lifted the S&P 500 Index to record highs. The technology-heavy Nasdaq Composite lagged and finished flat. For SPX, 2021 was the best year of a three-year stretch of consecutive double-digit gains, raising the average annual return since 2019 to 26%.

Among major indexes, the best performer in 2021 is SPX with 27% gains, on the other hand, the worst performer is .HSI index with 14% losses. Singapore market recorded 10% strong gains, one of the best stock market in Asia. Refer to major indexes’ yearly and weekly performance tables below.

Key highlights for the year 2021 and 2022 outlook:

1.    U.S GDP growth in 2021 was the strongest since 1984, estimated to be 5.6% annualised. U.S stocks was the 6^th-best year since 1990, with SPX recorded 27% gains.

 2.  Looking forward, it’s expected 2022 should be positive but with more muted gains.

SPX sectors in play

Among the 11 SPX major sectors, the smaller sectors Energy(XLE) and Real Estate(XLRE) were among the top and 2^nd performers with 46% and 42% gains this year, Technology(XLK) recorded 34% gains in the 3^rd place. While the typically defensive utilities(XLU), and consumer staples(XLP) segments lagged. Refer to below sector indexes weekly performance table, ranked by yearly performance.

Technically, all three major indexes uptrend was well intact.

DJI monthly chart

SPX monthly chart

Nasdaq monthly chart

China/HK

The Shanghai Composite Index (SSE monthly chart) recorded 5% gains in 2021. In regulatory news, the country’s securities industry watchdog China Securities Regulatory Commission (CSRC) published draft rules that would require Chinese companies seeking initial public offerings (IPOs) and additional share sales overseas to register with the CSRC.

In Hong Kong, the benchmark Hang Seng Index retreated 14%—its worst performance in a decade—and the Hang Seng China Enterprise Index lost 23% in 2021. During the week, the chairman of China's securities regulator said the country will stabilize and reform its capital markets next year. Hang Kong(.HSI monthly chart) Hang Seng Index recorded 2^nd week rebound consecutively.

Singapore

STI index(STI monthly chart) closed with strong return of nearly 10% in 2021, a very good year.

Singapore GDP was -5.4% last year 2020 severely hit by COVID-19 outbreak and it turned around very quickly this year in line with other major economies, GDP growth expected to be around 7% this year and 3-5% next year as per official forecast. From this perspective, Singapore stock market expected to continue do well nest year but with moderate gains. Sectors such as banking(DBS, OCBC, UOB) will benefit from rising interest rates and tourism related stocks which hit hard by Covid expected to rebound along with Covid recedes.