Key Highlights
- The S&P 500® was down 2.50% in December, bringing its 2024 return to 23.31%.
- The Dow Jones Industrial Average® lost 5.27% for the month and was up 12.88% for 2024.
- The S&P MidCap 400® decreased 7.29% for the month, bringing its 2024 return to 12.20%.
- The S&P SmallCap 600® returned -8.12% in December and was up 6.82% for 2024.
Market Snapshot
After a difficult 2023, 2024 was even harder, but both years brought gains, as the S&P 500’s 2024 gain was 23.31%, while it increased 24.23% in 2023, bringing the two-year gain to 53.19%. Breadth was positive (but not as strong as the gain would imply), with 332 issues up and 169 down for 2024, as 2023 posted 322 up and 179 down, and 353 were up and 146 down over the two-year period. Of course, no one wants to talk about 2022, which was down 19.44%, with only 139 issues up and 363 down, as the three-year return was 23.40% (7.26% annualized), with 274 up and 224 down (and that’s with survivorship bias); 117 were down at least 20% over the three-year period. In aggregate terms, the S&P 500 added USD 9.76 trillion into investors’ pockets in 2024 (it added USD 7.91 trillion in 2023 and took away USD 8.23 trillion in 2022), which excludes a record USD 630 million in dividends (USD 588 million in 2023 and USD 565 million in 2022).
As for the Magnificent 7, the group accounted for 53.1% of the S&P 500’s 2024 total return, which means the 25.02% total return would have been 11.75% without them. The post-Nov. 5, 2024, 1.95% total return would have been -0.35% (2023’s 26.29% would have been 9.94%), as the two-year total return of 57.88% would have been 24.35% without the Magnificent 7—which calculates to 11.5% annualized and is still better than the long-term (from 1926) S&P 500 annualized total return of 10.5% (but not as good as the 12.0% annualized return since I started at S&P in 1977).
As for sectors, those within the Magnificent 7 did better, as Communication Services (which includes Alphabet and Meta) did the best for the year, up 38.89% (up 27.73% from the 2021 close), with Information Technology (Apple, Microsoft and NVIDIA) up 35.69% (50.86%) and Consumer Discretionary (Amazon and Tesla) adding 29.13% (13.68%). Financials, which has no Magnificent 7 representation, posted a 28.43% (23.75%) gain, as Utilities gained 19.58% (5.84%). Materials did the worst and was the only negative sector for 2024, as it was down 1.83% (-7.00%). The S&P 500’s market value decreased USD 1.224 trillion for the month (up USD 2.793 trillion last month) to USD 49.805 trillion and was up USD 9.766 trillion for 2024; it was up USD 7.906 trillion for 2023 and down USD 8.224 trillion in 2022.
The Dow Jones Industrial Average set one new closing high in December (48 YTD), as it traded and closed above 45,000 (45,014.04 closing high and 45,074.63 intraday high), after setting seven highs in November, seven in October, seven in September, four in August and three in July. For the month, The Dow closed at 42,544.22, down 5.27% (-5.13% with dividends) from last month’s close of 44,910.65, when it was up 7.54% (7.74%) from the prior month’s close of 41,763.46 (-1.34%, -1.26%). For the Q4 2024 three-month period, The Dow was up 0.51% (0.93%). The 2024 return was up 12.88% (14.99%), as 2023 was up 13.70% (16.18%) and 2022 posted a decline of 8.78% (-6.86% with dividends).
The final 2024 election result count had Trump receiving 312 electoral votes (270 needed) compared to 226 for Harris, as the popular vote result was 49.9% (77.3 million votes) for Trump versus 48.4% (75.0 million) for Harris. The upper chamber (Senate) turned Republican, with a 53-47 majority over the Democrats (currently Democrats are in control at 51-49). The lower chamber (House of Representatives) remained in Republican control, with 220 Republicans and 215 Democrats (218 needed to win a majority); there are currently 220 Republicans, 212 Democrats and 3 vacancies.
Congress approved (House: 366-34; Senate: 85-11) and the president signed a stop-gap budget to extend funding for the government until March 14, 2025, preventing a government shutdown. A last-minute attempt to extend the suspension of the debt (which expired Jan. 1, 2025) or increase it failed.
