Slow and Steady Wins the Race

The past year has been positive but unspectacular for the markets, but one thing it surely has been is consistent. No matter what happens today, the S&P 500 is guaranteed to finish the year without ever being down for four consecutive trading days. That marks the first year in which that has happened since S&P began its indexes, dating back to the 1920s.

By contrast, there were 11 stretches in 2014 where the S&P increased in value for at least four consecutive days. But there were just six stretches where the index declined for three consecutive days - and each time, the fourth day was a positive.

The last time the S&P 500 fell for four straight days was in a stretch that ended on December 13, 2013. Let's hope 2015 brings us another year without any long losing streaks.

A Big Finish for Small Caps

It was a long year for owners of small-capitalization stocks, as we've discussed several times in this space. The Russell 2000, the most widely used index of small caps, collapsed in the third quarter, falling by 11 percent between early September and mid-October.

But since bottoming out two and a half months ago, small caps have rebounded strongly, gaining 16 percent in that time frame. At long last, the Russell 2000 set a new all-time high on December 26th, just four days before the end of the trading year.

And it's not done yet, reaching another record high yesterday. The Russell 2000 is now up 4.8 percent on the year - not bad for an asset class that many had left for dead two months ago.

A Strong Year for Utilities

What sector of the market performed the best in 2014? It was the usually sleepy utilities, which are generally considered a safe, defensive part of an investor's portfolio. With a couple of trading days left in the year, the utilities sector of the S&P 500 is up 28 percent in 2014.

Close behind the utilities are health care, up 25 percent, and technology, up 18 percent. All the S&P's sectors have increased in value on the year except for energy, which has been dragged down by 9.5 percent, thanks to the worldwide collapse in oil prices, which are down more than 40 percent on the year.

Those quiet utilities are now, in fact, in danger of becoming overbought. The price-to-earnings ratio for that sector is up to 18.8, which is slightly higher than the S&P 500 as a whole at 18.5

A Look Back at Third-Quarter GDP

The biggest financial news of this ordinarily quiet week was the Commerce Department's final estimate of our third quarter GDP figure at 5.0 percent (up from the second estimate of 3.9 percent), making it our nation's strongest quarter for economic growth since 2003. The upward revision reflected changes in the estimates of personal consumption expenditures, commercial real estate, and business inventory.

The biggest drivers of that growth were:

• Commercial real estate increased by 8.9 percent
• Consumer durable goods increased by 9.2 percent
• Investment in business equipment increased by 11.0 percent
• Federal government expenditures increased by 9.9 percent, including a 16.0 percent increase in defense spending

Thoughts for Christmas Day

The best of all gifts around any Christmas tree: the presence of a happy family all wrapped up in each other. ~Burton Hillis

Instead of being a time of unusual behavior, Christmas is perhaps the only time in the year when people can obey their natural impulses and express their true sentiments without feeling self-conscious and, perhaps, foolish. Christmas, in short, is about the only chance a man has to be himself. ~Francis C. Farley

Gifts of time and love are surely the basic ingredients of a truly merry Christmas. ~Peg Bracken

Not a Creature Was Stirring

Happy Christmas Eve! You probably have better things to do today than watch the movement of the stock market, and it's just as well. Not only do most of the stock traders also have more important things to do, but the market closes early today: The New York Stock Exchange will shut its doors at 1 p.m.

So as you might guess, next to nothing ever happens in the market on Christmas Eve. Over the past ten years, the S&P 500 has seen an average gain of a microscopic 0.03 percent on December 24.

Last Christmas Eve the S&P gained 0.3 percent. The biggest move in the past ten years on today's date was a 0.8 percent gain in 2007. So if you have presents to wrap or baking to do - feel free to focus on that today, and don't worry about what the market will do.

Gas Hits a Record

As we near the end of 2014, one of the biggest financial stories of the year continues to be the dropping price of oil, and with it the falling price of gasoline. National gas prices are now at their lowest average level in five and a half years.

Over the weekend, AAA noted that gas prices had now fallen for 88 consecutive days, which is a new record, at least in the ten years that such things have been tracked. The average price of a gallon of gas hasn't ticked up since September 24. The previous record was 87 days back in the summer of 2008.

Here in New Jersey, the average price of a gallon of gas fell to $2.39 yesterday, and has dropped by seven and a half cents in the past week. There are a handful of places in the state where it is already under two dollars a gallon.