An Exceptional Year for Investors in 2024

NEW YORK -- Investors have seen a fantastic year in 2024.

U.S. stocks surged significantly, propelling the S&P 500 to new record highs as the economy continued its expansion and the Federal Reserve initiated interest rate cuts.

This year showcased well-known winners like Big Tech firms, which saw their stock prices escalate even more. However, it wasn't limited to just companies like Apple and Nvidia; alternative investments, including Bitcoin and gold, also enjoyed substantial increases.

Here are some key numbers that characterized 2024 as of December 20.

The S&P 500 is on track to end the year with an impressive increase of 24.3%, building on last year's remarkable rise of 24.2%. This marks the first occurrence since 1998 that the stock market has closed two consecutive years with gains of at least 20%. This was a time when President Bill Clinton was impeached and baseball’s Mark McGwire hit his 70th home run.

The total number of all-time highs set by the S&P 500 during the year reached a notable count. It began on January 19, reflecting a recovery following a downturn brought on by high inflation and concerns about potentially recession-inducing interest rate hikes by the Federal Reserve. Throughout the year, the index consistently set records in most months, except for April and August, with the latest milestone recorded on December 6.

This year, the Federal Reserve cut its main interest rate three times from the two-decade high, providing some much-needed relief to the economy. Traders' expectations for these cuts, alongside hopes for more in 2025, played a significant role in the stock market's performance. However, the total reduction of 1 percentage point fell short of the anticipated 1.5 percentage points many traders forecasted at the start of the year. The Fed's announcement in December, suggesting only two more rate cuts in 2025, disappointed some investors.

Following Election Day, the Dow Jones Industrial Average jumped over 1,000 points as investors reacted to the possibilities surrounding Donald Trump’s potential return to the White House. The S&P 500 experienced its most significant single-day increase in nearly two years, soaring by 2.5%. Alongside Bitcoin, financial stocks and smaller market players appeared to be among the primary beneficiaries. However, this initial surge has since eased due to growing concerns that Trump’s policies might exacerbate inflation.

Bitcoin achieved a new record, surpassing $108,000 in value last month. This rise followed the downward trend of interest rates and was significantly amplified post-election, amid Trump’s newfound appreciation for cryptocurrency. Moreover, he appointed a former regulator recognized for a favorable approach towards digital currencies as the next chair of the Securities and Exchange Commission, which helped bolster confidence in the market. Just two years ago, Bitcoin's value was below $17,000 after the collapse of the crypto exchange FTX.

The rise in gold prices mirrored that of U.S. stocks, as it also hit record levels during the year. Global conflicts raised demand for safe-haven investments like gold, which also benefited from the Fed's interest rate cuts. As bond yields drop, gold becomes more attractive despite not paying interest.

Tesla’s stock price crossed the notable threshold of $420 this December, setting a new record. This figure is often associated with Elon Musk, who had previously stated in 2018 that he had secured funding to privatize Tesla at that price. Tesla's stock rallied this year from under $250, partly due to the optimistic perception of Musk’s ties to Trump.

Nvidia reported an astonishing $39 billion in revenue for the nine months leading up to October 27, showcasing the financial impact of the artificial intelligence boom. As Nvidia’s chips are instrumental in powering AI advancements, the company’s market valuation soared to over $3 trillion.

GameStop rose significantly on May 13 following a public appearance by Keith Gill, known as “Roaring Kitty,” who re-engaged with the video game retailer’s stock, which he had previously propelled during the meme stock frenzy in 2021. His support also boosted other meme stocks like AMC Entertainment. However, he sold all his Chewy shares by late October.

The U.S. economy displayed resilient growth, averaging an annualized rate of 3.0% in each of the first three quarters of the year, surpassing expectations amid fears of a recession created by the Federal Reserve’s tight monetary policies. Despite lingering pain among lower-income households dealing with high prices, the broader economy has shown remarkable strength.

The vacancy rate for U.S. office buildings reached an all-time high of 19.6% through the first three quarters of 2024 based on data from Moody's. The stability of this rate throughout the year was seen as a positive outcome for office space owners, as it had risen steadily from 16.8% since late 2019, highlighting the impact of remote work trends from the pandemic.

The U.S. housing market saw approximately 3.6 million previously occupied homes sold nationwide through November. To match the total of 4.09 million homes sold in 2023, sales would need to surge by 20% in December, which is unlikely given the ongoing slump since 2022 due to rising mortgage rates and a housing supply shortage, discouraging many potential homebuyers.

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