A Banner Year for Investors: 2024 in Review
As the curtain closes on 2024, investors are celebrating a remarkable year of growth. The U.S. stock market has soared, with the S&P 500 reaching record highs, driven by a strong economy and the Federal Reserve’s decision to cut interest rates.
Familiar Winners and New Stars
Big Tech companies, such as Apple and Nvidia, have continued to dominate, with their stock prices reaching new heights. However, other investments have also shone bright, including Bitcoin, gold, and smaller winners like banks.
A Rare Feat: Back-to-Back Years of 20% Growth
The S&P 500 is on track to achieve a rare feat: closing out a second straight year with a gain of at least 20%. This hasn’t happened since 1998-1999, when President Bill Clinton was impeached and baseball’s Mark McGwire hit his 70th home run.
A Year of Record-Breaking
The S&P 500 has set a record 64 times this year, with the first all-time high coming on January 19. The index has climbed 24.3% so far this year, not including dividends, following last year’s 24.2% surge.
The Federal Reserve’s Role
The Federal Reserve has cut its main interest rate three times this year, offering relief to the economy. While the 1 percentage point cut is short of the 1.5 percentage points forecasted, it has still had a significant impact on the market.
Election Day Boost
The Dow Jones Industrial Average rose 1,000 points the day after Election Day, as investors reacted to Donald Trump’s return to the White House. The S&P 500 soared 2.5% for its best day in nearly two years, with banks and smaller winners also benefiting.
Bitcoin’s Meteoric Rise
Bitcoin has topped $108,000, driven by falling interest rates and Trump’s newfound support for crypto. The cryptocurrency has come a long way since its collapse in 2022, when it fell below $17,000.
Gold’s Golden Run
Gold has also hit records, rising 14% this year. Wars around the world have driven demand for safe-haven investments, and the Fed’s rate cuts have made gold more attractive.
Tesla’s Record-Breaking Year
Tesla’s stock price has passed $420, a threshold with a special significance for Elon Musk. The company has soared this year, driven by expectations that Musk’s close relationship with Trump could benefit the company.
Nvidia’s AI-Driven Growth
Nvidia’s revenue has catapulted to over $39 billion in the nine months through October, driven by the artificial-intelligence frenzy. The company’s worth has surpassed $3 trillion.
Meme Stocks Make a Comeback
GameStop’s stock surged 13% in May after Keith Gill, aka “Roaring Kitty,” appeared online to support the video game retailer. Other meme stocks, including AMC Entertainment, also jumped following his post.
The Economy’s Resilience
The U.S. economy has grown at an annualized rate of 3.5% in each of the first three quarters of this year, defying expectations and remaining remarkably resilient despite high inflation.
Office Vacancy Rates Hold Steady
The vacancy rate for U.S. office buildings has held steady at an all-time high of 19.4% through the first three quarters of 2024, according to data from Moody’s.
Housing Market Struggles
The U.S. housing market has been in a sales slump since 2022, with a shortage of homes for sale and elevated mortgage rates discouraging would-be homebuyers.
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