- The S&P 500 in December could notch 12 straight months of record highs, matching a streak only seen in 2014.
- LPL Financial said worries about the Omicron coronavirus variant could halt the monthly run of new records.
- The S&P 500 gave up gains Wednesday as the first US Omicron case was confirmed.
The S&P 500 could mark 12 consecutive months of notching a new record high, but worries about the Omicron coronavirus strain could put the longest streak of records in years at risk, says one wealth management firm.
The benchmark of large-cap stocks has logged 66 record highs during 2021 and is in “rare air” in making new highs each month.
“Should the S&P 500 make new highs in December that would be a perfect 12 for 12, matching 2014 as the only year to complete this incredible feat,” according to a Wednesday note from LPL Financial.
The S&P 500 has charged up about 22% this year, fueled largely by hefty profit growth for companies listed on the index.
But the Omicron threat was underscored Wednesday, as US stocks gave up strong gains after the first US case of the new variant was confirmed in California.
“Here comes December, historically a pretty solid month for stocks, but now we have the Omicron variant wreaking havoc on markets,” said Ryan Detrick, LPL’s chief market strategist, in writing about December trading conditions.
On Tuesday, a stock selloff knocked off about 2% from the S&P 500 after the CEO of biotech firm Moderna warned that vaccines could be less effective against Omicron. The World Health Organization last week named the coronavirus variant and said it had a large number of mutations.
Questions still remain about the variant and its potential impact on financial markets, said Detrick. “As of now we’re optimistic that stocks will sidestep the new variant worries, but we recommend investors buckle up their seatbelts, as the end of 2021 could be a bumpy one.”
The S&P 500 has historically gained 1.5% on average in December, the third-best month of the year after April and November.
Most of December’s gains typically occur in the second half of the month, said Detrick, “right as the holiday good feel vibes start to come out.”