U.S. stocks dropped on the last session of the year, while Treasury bonds remained stable and the U.S. dollar lost ground.
Both the S&P 500 and the Nasdaq 100 posted losses after a bumpy, low-volume session, but which closes out a an exceptional year for equities, in which the S&P 500 and Nasdaq 100 are up nearly 27%, outperforming even the most bullish outlook at the beginning of the year.
The benchmark S&P 500 index closed the year at 4,766, less than 30 points below its 70th record close, reached midweek. This is still well above the levels predicted by analysts in a January survey, where the top projection was 4,400 and the median of 22 estimates was 4,074.
“If there’s one thing we’ve learned this year, it’s that the U.S. economy has proven resilient in the face of pandemic-related challenges,” said Brett Ryan, senior U.S. economist at Deutsche Bank. While uncertainty over the Omicron variant and fiscal policy remain, “the economy is likely to continue to expand at a pace well above trend even if these risks materialize”, he said.
Read More: Big Tech Adds $2.5 Trillion in Value on Robust 2021 Gains
The U.S. dollar declined against most of its Group of 10 currencies on Friday, while oil declined, slowing the biggest annual advance since 2009. Bitcoin rose for a second session, reducing its biggest monthly decline since May and trading at around US$48,000.
Latin America
Across the region, most stock exchanges did not trade this Friday, with Peru and Mexico the only two active for at least part of the day. The former registered a drop of 0.22%, while the latter rose by 0.18%.
Here is our roundup of the region’s news and how the markets performed:
Argentina
The country continues to deal with a sharp rise in Covid-19 cases and the last day of the year saw the second-highest number of infections since the start of the pandemic, second only to Thursday’s caseload, with 47,663 positive cases. The number of deaths remains low however, with 23 overnight Thursday.
Brazil
Stock analysts are set to begin coverage of Latin America’s most valuable financial company, Nu Holdings, next week, weighing its growth prospects against relatively generous valuations. Lead underwriters Morgan Stanley, Goldman Sachs and Citigroup will be issuing reports starting Monday, 25 days after the company’s IPO. Since its NYSE debut in December, shares have risen 4.4% to $9.40, giving the company a market capitalization of about $43 billion.
Chile
Giorgio Jackson, a political advisor to President-elect Gabriel Boric, has called for the postponement of the government’s public tender for lithium exploitation, according to a report in El Mercurio newspaper on Thursday night. The congressman explained that the incoming government, citizens and academics have different opinions and see several problems in the tender that is currently under way, and therefore should be postponed.
Colombia
Colombia’s exports totaled $3.98 billion in November, an increase of 58% compared to the same month of 2020, according to statistics agency DANE. The increase was mainly due to the 117.9% growth in foreign fuel sales.
Ecuador
Oil production and refining in the country is to resume following the reopening of its pipelines connecting oil fields in the Amazon region with the port of Esmeraldas, the Ministry of Energy said in a text message. It will take between seven and 10 days to restart production in the fields that had to be shut down when the pipelines stopped operating to avoid erosion damage. Each well will be evaluated individually to determine if it needs refurbishment work.
Mexico
The Mexican Stock Exchange, like most of its peers, had a very shaky performance, but with little trading. Benchmark index Mexbol posted a 7.19% gain for December, its best month this year, and achieved its strongest annual performance in over a decade, ending 2021 with an annual increase of 20.89%, the highest since 2009. Markets are bracing for a new era at the Bank of Mexico, as this Dec 31 marks the end of the tenure of Alejandro Diaz de Leon as governor, who will be replaced in January by Victoria Rodríguez Ceja, who was nominated by President Andrés Manuel López Obrador.
Peru
Peru’s fiscal deficit fell to less than 3% of GDP in 2021, Finance Minister Pedro Francke said on Twitter, “surpassing initial estimates that pointed to 6%, being the largest reduction in the region and with the highest GDP growth (+13%)”, Francke tweeted. A fiscal deficit closer to 4% was expected by October 2021, as a result of the significant revenues that the country has raked in from mining profits, among other sources.
This is how the markets behaved on Friday, December 31:
