People walk past the New York Stock Exchange on Wall Street in New York City.
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The stock market did not soar as high as most analysts expected.
The S&P 500 ended the year with a 27.2% gain. The benchmark has grown in double-digits for the third straight year and has increased by more than 15% from 2020. The 70 record closes were enjoyed by the index.
Wall Street's full-year projections from a year ago were surpassed by overwhelming optimism. The S&P 500 target of 4,400 was the most bullish outlook going into the year. Goldman Sachs had a projection of 4,300 and UBS had a projection of 4,100.
The Street's most bearish target was 3,800 for Bank of America, Citigroup, and Societe Generale. The S&P 500 would have risen 1.2% if the projection had been true.
The banks lifted their targets as the stock market went up. Several developments boosted sentiment in the following months.
The door for reopening was opened by the vaccine approvals and rollouts in early 2021. Many returned to work and created a wave of demand. After a year of restrictions, layoffs, and closed doors, the economy finally took strides toward a new normal.
The US received more support early in the year, but not as much as it did in 2020. The Democrats passed a $1.9 trillion package in March that gave the economy more fiscal aid. An expansion to the child tax credit was included in the plan. Spending went up as Americans used the direct aid.
Over the last year, investing wasn't always smooth. In January, dailyVID cases hit a record high as the winter resurgence crept into the new year. The Delta variant drove cases higher in July and August, and the Omicron variant is now driving the rebound in cases. Each wave has dragged on consumer confidence and slowed the pace of the economic recovery despite the US never returning to the strict lockdowns seen in 2020.
The Federal Reserve pulled back on its support. In November, the central bank said it would stop buying Treasurys and mortgage-backed securities in order to fight inflation. The central bank is expected to raise interest rates three times in the next five years, after doubling the pace of its reduction in December.
Banks have wildly different expectations for how stocks will perform in the year ahead, because of Omicron's spread and the Fed's withdrawal. The second- largest gap in a decade has been boasted by firms' S&P 500 targets. Morgan Stanley and Bank of America analysts think the benchmark will close lower at the end of 2022, with the banks projecting 4,400 and 4,600.
The index's annual slump will be the largest since the financial crisis if Morgan Stanley's target is true.
The party is expected to rage on into the future. As of December 13, Credit Suisse had the highest target of 5,300, followed by Goldman, and then the others.
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Business Insider has an original article.
