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The S&P 500 closed 2014 at 2,058.9. On Tuesday, it opened at 2,060.5. In other words, the stock market has effectively gone nowhere this year.
But to actually characterize 2015 as a year when stocks went nowhere would be a horrible oversimplification of what happened. It would belie the dynamic, multifaceted economic story that actually occurred.
Two big macro themes are worth highlighting: (1) Oil prices stayed very low, crushing profit margins for drillers, and (2) US consumer spending was robust, at least partially aided by low energy prices and high employment.
In the S&P 500, energy stocks are down 23% this year, making it by far the worst-performing sector of 2015. Meanwhile, consumer discretionary stocks are up 9.1%, making it the best-performing sector.
"Hail the consumer!" Gluskin Sheff's David Rosenberg extolled.
Gluskin Sheff
Rosenberg additionally pointed to new MasterCard data that revealed holiday spending this year had jumped 7.9% from a year ago. We'd add that Rosenberg circulated his note before Tuesday's surprisingly strong consumer confidence report.
"The American consumer is set for a breakout year in 2016 as wage gains accelerate, the job market continues to generate payroll gains of at least 200,000 per month ... and the household sector has some dry powder to put to work as well with the personal savings rate starting off 2016 well in excess of 5%," Rosenberg said.
He continued: "So don't be surprised if in another flattish year for the S&P 500 that we again see the Consumer Discretionary group emerge atop the leader board."