Saying goodbye to a wild year for stocks

We’re hoping to shelve the word ‘unprecedented’ for a while as 2021 gets underway — but first, one final look at a 2020.

The Dow and the S&P 500 ended the year at record highs and the Nasdaq Composite logged its best performance since 2009 with a whopping 43.6% jump. Overall, the indexes registered gains for the second year in a row.

Nobody could have predicted the market mayhem of 2020. Stocks hit record highs at the start of the year, before worries about the coronavirus pandemic — first abroad and then closer to home — pushed US markets into a spiral in February and March. The Dow routinely set new records for worst one-day point drops in history, and the New York Stocks Exchange had to suspend trading in the S&P 500 multiple times as the selloff triggered circuit breakers.

But in the months that followed, the market recovered — and faster than many had expected. One major factor in the surge was unprecedented action by the US Federal Reserve to stabilize markets and boost the economy.

Some of the year’s biggest winners are investors who closed their eyes and muffled their ears during the pandemic selloff and held onto their stocks. By the end of the year, their portfolio balances were looking pretty good.

“This year was a year with a lot of reminders for investors: number one, don’t overreact,” Leo Grohowski, chief investment officer at BNY Wealth Management, told CNN Business.

At the same time, many people will look back at 2020 and be startled at how well the stock market performed in such adverse economic conditions. The disconnect between Wall Street and Main Street will likely be a topic that follows us into the New Year.

America’s economy is nowhere near back to its pre-pandemic strength and millions of people remain unemployed. The US economy is operating at 82% of where it was in early March, according to the Back-to-Normal Index from Moody’s Analytics and CNN Business.

With the stimulus measures recently approved by President Donald Trump and more government help expected next year, there is plenty to be optimistic about for 2021. President-elect Joe Biden’s plans to get the economy back on track will help markets next year, even if the excitement about more stimulus might begin to fade, said JJ Kinahan, chief strategist at TD Ameritrade.

These sectors were the surprise winners of 2020

In a year of widespread and often devastating hardships, no business or industry came through 2020 untouched by the Covid-19 pandemic. But for some key sectors, the news wasn’t all bad.

Here’s a breakdown of the winner and losers CNN Business put together:

Winners

• Big Tech
• Housing
• Solar
• Bitcoin
• Big Retail
• Video games
• Cannabis
• Streaming

Losers

• Travel and hospitality
• Oil
• Banks
• Airlines
• Malls
• Automakers
• Manufacturing
• Movie theaters

Check out the full story on CNN Business for analysis on what comes next for each sector.

Up next

Monday: OPEC+ meeting

Tuesday: US ISM Manufacturing Index; German employment data

Wednesday: Jefferies earnings; Federal Reserve minutes; EIA Crude Oil Inventories

Thursday: Bed Bath & Beyond, Carnival, Conagra, Walgreens Boots Alliance and Micron earnings; EU inflation; US initial claims

Friday: US jobs report; EU unemployment