The Dow Jones Industrial Average started trading more than 125 years ago and yesterday it closed above 36,000 for the first time ever. Along the way, the S&P 500, Nasdaq, and Russell 2000 (small caps) all closed at new all-time highs as well.
“We understand all of the worries. Labor shortages, inflation, the pandemic, the Fed, Washington drama, supply chain bottlenecks, and a slowing economy,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But the other side of the coin is earnings have been really good and the stock market is looking forward to better times, not looking in the rear view mirror at the bad news.”
As shown in the LPL Chart of the Day, the Dow has hit five separate 1,000 level milestones in 2021, the most ever. Yes, the percentage between each level gets smaller higher you go, but this is still an amazing feat.
What now? Well, the bull market looks poised to continue its run. In fact, when the S&P 500 is up more than 20% for the year heading into the seasonally bullish month of November, stocks have never been lower—higher all eight times. The returns get better as well, up 3.7% versus the average November return of 1.7%. Not to be outdone, the final two months of the year have been higher all eight times as well, up 6.2% versus the average final two months return of 3.2%.
We’re thankful for the strong stock market performance this year, but there may be more to come before year-end. We continue to expect stocks to outperform bonds and maintain our overweight to equities.
Be sure to watch our latest LPL Market Signals podcast, as Ryan and Jeff Buchbinder discuss current trends they are seeing in stocks and the economy. You can watch all of our videos on the LPL Research YouTube channel here.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. All index and market data from FactSet and MarketWatch. This Research material was prepared by LPL Financial, LLC. Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking # 1-05208857