In One Chart: The S&P 500 has put another chapter in its historic march higher

Who says 13 is an unlucky number?

It has been basically impossible for investors to lose money in the U.S. stock market over the past year, as equities have enjoyed a steady climb upward with little in the way of volatility or pullbacks. The S&P 500 SPX, +0.82%  already set a record this year for how long it has gone without a 3% decline from a peak — something that is typically quite common; the streak remains unbroken — and with the end of November trading it has extended another one.

On a total-return basis that includes dividends, the benchmark index rose 2.2% over the course of November, extending its string of monthly advances to a record 13. The previous streak, according to Dow Jones data, was a 10-month rally that ended in September 1995.

Over the entire 13-month period, the benchmark index rose 26.3% on a total-return basis.

On a purely price basis, the S&P 500 has risen in 12 of the past 13 months, owing to a slight decline in March, when the index fell 0.04%.

The Dow Jones Industrial Average DJIA, +1.39%  rose 3.8% in November, closing out its eighth straight positive month, its longest such streak since 1995, according to FactSet.

The S&P 500 has been pushed higher by a number of factors ever since October 2016, the last negative month for the total-return S&P. First, the election of Donald Trump spurred a rush of buying as investors bet the new administration would lead to deregulation and other policies seen as market friendly. Bank stocks were the primary gainers of that phase of the rally.

Subsequently, the market’s leaders were internet and technology companies, with the so-called FAANG group of stocks driving equities higher, at one point accounting for a quarter of the overall market’s advance. FAANG refers to a quintet of stocks — Facebook FB, +1.17%  , Amazon AMZN, +1.33%  , Apple AAPL, +1.40%  , Netflix NFLX, -0.30%  , and Google parent Alphabet GOOG, -0.02% GOOGL, -0.12% — that have seen among the fastest growth in the market.

In November, particularly in the final trading days of the month, investors bid shares higher on hopes that tax reform legislation would be passed in Washington. A vote on the legislation could take place as soon as Thursday evening. On Wednesday, the Senate voted to open a formal debate on the proposed tax changes.

“What had lifted the market in the first part of the year was an ever-improving economy and profitability. It wasn’t about the prospect for tax reform. What you’re seeing now, however, is the next leg where tax reform starts to get baked in. If you bake in what tax reform means, the market doesn’t look pricey,” said Alicia Levine, investment strategist at BNY Mellon Investment Management.

If history is any indication, the S&P’s record-setting streak could continue, as December is typically a strong month. According to the Stock Trader’s Almanac, December is historically the strongest month of the year, with an average gain of 1.6%, based on data going back to 1950.

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