- Edward Benz, Jr.
Q4 Market Update
Strong December caps off solid year
Markets continued to rally in December. The Nasdaq
Composite led the way with a 5.71 percent gain for the
month. The S&P 500 gained 3.84 percent, and the Dow
Jones Industrial Average (DJIA) rose by 3.41 percent. These
results contributed to a strong quarter for markets, with the
Nasdaq up 15.63 percent, the S&P 500 up 12.15 percent, and
the DJIA up 10.73 percent. For the year, DJIA gained 9.72
percent, the S&P 500 returned 18.40 percent, and the
Nasdaq surged 44.92 percent.
These strong results coincided with improving
fundamentals. According to Bloomberg Intelligence, as of
December 24, the blended third-quarter earnings decline
for the S&P 500 was 6.9 percent, much better than the initial
forecast for a 21.5 percent decline.
Technical factors were also supportive. All three major
indices remained above their 200-day moving averages for
the sixth consecutive month, indicating technical support
for markets through the second half of the year.
International markets also finished the year strong. The
MSCI EAFE Index gained 4.65 percent in December, which
contributed to a 16.05 percent increase for the quarter and
a 7.82 percent annual gain. The MSCI Emerging Markets
Index gained 7.40 percent for the month, 19.77 percent for
the quarter, and 18.69 percent for the year. Technicals were
supportive for international markets at year-end, with both
indices finishing December above their 200-day moving
Fixed income markets also ended the year with positive
results. The Bloomberg Barclays U.S. Aggregate Bond Index
gained 0.14 percent in December, 0.67 percent for the
quarter, and an impressive 7.51 percent for the year.
High-yield fixed income returned 1.88 percent during the
month, 6.45 percent for the quarter, and 7.11 percent for
the year. High-yield credit spreads finished the year at 3.87