• The S&P 500® was down 9.18% in December, bringing its return for 2018 to -6.24%.
• The Dow Jones Industrial Average® lost 8.66% for the month and was down 5.63% for the year.
• The S&P MidCap 400® was down 11.48% for the month and down 12.50% for 2018.
• The S&P SmallCap 600® returned -12.26% in December and fell 9.75% for the year.
It was a December to remember (or maybe better to forget), as the S&P 500 posted its worst December performance (-9.18%) since 1931 (-14.53%) and flirted with the bear (it would have entered the classification if intraday levels were used; we use closing). It ended the month halfway between a correction (-10%) and the bear (-20%), off 13.97% from its closing high and off 6.24% for the year (after being up 9.62% YTD in September).
The S&P 500 returned strongly to the red in December (historically the month is up 73.3% of the time), posting its worst month since February 2009 (-10.99%), after November's battle that ended with a profit (up 1.94%) and October’s decline (-6.94%). The issues for the past three months (-13.97%) have been the global economic slowdown (some countries have shown a contraction), trade issues between the U.S. and China (with Chinese markets in a deep decline, but reports of new January talks rumored), the increased cost of materials and labor (as more companies warned) even as oil prices have declined (which gives some relief to costs and consumers, with some seeping into core inflation), and geopolitical issues (headed by immigration and nationalistic polices). The combined uncertainty, and the inability of investors or companies to control the issues, has caused greater anxiety in the markets, along with a decline in confidence.