Another Strong Year Overall

This year had its struggles, but all major domestic equity markets finished higher in the end.1 While uncertainty was common throughout the year, the market remained fairly calm and did not see many dips. The easing of COVID-19 restrictions led to more of the economy reopening, while government stimulus programs helped keep household and corporate balance sheets healthy. Strong consumer demand across the states kept sustained pressure on supply chains, home prices continued to climb, and unemployment declined to almost pre-pandemic levels.

Inflation Continues

The notable downside to this rebound has been a change in inflation rates across many goods and services in the economy. The Consumer Price Index (CPI) continues to increase with Energy, New & Used Cars, Durable Goods all reading higher.3 As supply chain issues are resolved, some of these pressures should subside over time. It will be important to continue to monitor the makeup of the Inflation Reading.

Moving Cryptocurrency Forward

Cryptocurrency continued to gain steam and popularity. The first “Bitcoin ETF” started trading on exchanges using Bitcoin futures, and Non-Fungible Tokens (NFTs) became frequent news ticker items. Christie’s auctioned the first-ever purely digital artwork (Beeple, “Everydays: The First 5000 Days,” pictured above), which was the first with a unique NFT — a guarantee of its authenticity. For the first time, Christie’s accepted Ether, a form of cryptocurrency, in addition to standard forms of payment for the sale ($69 million). This is a major step in the evolution of cryptocurrency and the valuation of digital assets for investors.

1YCharts, FactSet
2US Bureau of Labor Statistics
3YCharts, FactSet
4Christie’s Auction House, Beeple’s Opus

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