This year has been a nearly stumble-free steady climb, with the S&P 500 index currently up over 22%. If the S&P 500 were to finish at this level, it would be the fifth-best yearly gain in two decades. December has historically been a good month for the market, and we anticipate this will continue into 2022.
Two main drivers have been corporate earnings and liquidity. Corporate earnings are up year over year, and more importantly, up over 15% from pre-COVID highs in late 2019.
On the savings front, the latest readings show the personal savings rate is 7.5% (savings as a percent of disposable income). This reading is the third-highest rate coming into Thanksgiving in the last quarter century. We believe consumers will begin spending these savings, which will further drive our economy and ultimately the stock market. This combined with the projected corporate earnings for 2022 should provide a solid foundation for a bull market to build upon next year.
With pandemic threats reemerging at the same time that the FMOC is starting to tighten, we believe the markets do face challenges ahead. To us, this does not mean the bull market is facing its demise, but it does mean the recent exceptionally low stock-market volatility and 20%-plus annual gains won't be replicated as we advance.
As we close out this past year and turn the calendar into 2022, we want to thank you for placing your trust and confidence in FSB Premier. Our firm and Bank are strong and growing, thanks to all of you! We believe our future together is optimistic and bright! As our lives evolve and you encounter milestone moments or subtle day-to-day changes, you can count on FSB to be by your side!
Written by: Tiffany Coffin
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