The US Dow Jones Industrial Average index jumped 25% this year – the highest annual growth since 2013, CNNMoney reports.
On Monday, US exchanges are closed due to the celebration of Catholic Christmas.
If subsequently this week the Santa Claus rally causes the Dow to increase by more than 26.5% year-on-year, this will be the best performance since 1995, when the blue chip index jumped 33%.
The broader S&P 500 index added 20% this year and is also preparing to show maximum annual growth over four years. The Nasdaq, meanwhile, rose nearly 30%.
Unlike the chaos in the cryptocurrency market, the stock market spent this year without any major upheaval. The S&P 500 has not experienced a fall of even 3% (in one or several days) since the time leading up to the US presidential election. This is the longest period of low volatility for the entire observation period.
Extreme calm sent the VIX volatility index to record low.
The euphoria on Wall Street was due to a combination of strong economic growth and increased profits.
The stock market was supported by expectations of tax reform in the United States. It is expected that the reform will help increase corporate profits, provoke the repurchase of shares and increase dividend payments.
Last week, US President Donald Trump signed into law on tax reform after approving the document in both houses of the US Congress.
2018 key question whether this experiment to stimulate an already healthy economy will lead to unintended consequences. The success formula for the eight-year-old bull market was sustained growth, the mysteriously low inflation rate and low interest rates of the Federal Reserve.
But if tax reform finally triggers inflation, it will force the Fed to accelerate rate hikes.
As of December 22, the growth leaders this year in the S&P 500 were shares of NRG Energy, an energy company with many assets in the renewable energy sector. Paper companies have more than doubled in price.
In second place in terms of growth were shares of Align Technology – a company engaged in the development of innovative medical technologies. The past quarter was the best for Align in the 20-year history of the company.
Micron chip makers were third in terms of growth in the S&P 500.
The worst dynamics in the index were shown by oil and gas sector shares: Range Resources, Baker Hughes and SCANA Corporation.