The Review: All Aboard, Next Stop, 2022
Holla, the year has been great and what next is here for the 2022 and who made what in 2021?
Hey Hisa fan,
It’s the slowdown, a period in the year when we forget about a lot and focus on the festive season. This period seemingly has some of the most unnoticed market days, in-brief, lots of fat-finger errors, hurried sales and festive rush technically hits on everyone, traders included.
This year has been a craze, what started filled with uncertainties tuned out to a short, but important year to investors. Here are what made 2021 an investment year.
Big Joe
The year kicked off with Joe Biden taking over the reign of power at the world’s most powerful office; the oval office; on the 20th of January, 2021.
The U.S President has presided over major events, the first one being the signing of a stimulus check, just two days into the office and later in the year, presiding over the signing of a USD 1.0 trillion infrastructure bill, the largest in the U.S history.
Biden ranks third in terms of post-world-war quarterly economic performance. In August, the US government declared the economy grew at an annualized rate of 6.5% in the second quarter.
This marked the second-largest jump in the gross domestic product since 2003, and in any normal year, signalling tremendous economic strength.
Biden made a final move into the financial systems for 2021 by renewing the term for Fed Chair, Jerome Powell.
The Federal Reserve
All throughout the year, the Federal Reserve of the United States has been top of heed for all investors. From the disbursement of the stimulus cheques/checks to maintaining, or should we say controlling, the inflation levels on one of the largest economies worldwide.
In December 2020, the Fed Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals.
The Feds have been active on the bond buyback market over the whole year, and they finally announced that the much-hyped quantitative easing (tapering) will be ending in March 2022.
The Fed Impact
The Fed statements released over the year have had a great impact on markets, giving investors cold and warm feet. Just like every central bank and interest rates, the Fed statement has been a directional piece to investors.
This year, the stimulus, the rates and tapering led the fed talks, lots of anxiety and we now have a look at what happens next year.
Historically, equity markets have risen an average of 10% in the six months leading up to the first-rate hike, compared with an average gain of 6% in the six months following.
The Games on Market.
We are all about markets, and we will not leave markets behind in this. There is the say that “The house always wins.” This year has been out of that, looks like the house hasn’t won much this year, well, at least until November.
So, who’s winning in 2021?
First on the block is Elon Musk for the individual category. The cheeky South-African billionaire, entrepreneur, “alien” and now American Person of the Year according to Times Magazine.
Musk who for the first time in a Score sold his Tesla shares to offset a $15 billion tax bill. Musk is definitely getting the trophy for paying the highest taxes from an individual in the U.S and the entire world history.
Musk has been a troll and an inspiration on Twitter, apart from having one of the highest twitter polls on his sale. Musk took a step further with various “wars” this year, from David Beasley, the U.N food program director on a $6 billion cause to end world food hunger, he extended the hit with one of the most fierce U.S Senators, Elizabeth Warren over tax allegations. He was even sued over tweets!
Off that, shares of the one and only Elon-related company Tesla Inc, hit various goals, becoming the first motor vehicle company to hit a market capitalization of $1 trillion. Well, maybe we should say, Tesla Inc., is a tech company that happens to be manufacturing cars.
Memes
Elon and Memes go hand in hand, I mean, if Elon could replace his second name, it would be Elon Memes, or maybe Mars, who knows.
Off-that, Meme stocks, the stocks war that started last year between the short-sellers ad the long squeeze retail market extended into 2021. Reddit users on the r/wallstreetbets subreddit forum encouraged retail traders to initiate a short squeeze on the stocks.
GameStop, the retailer of video games and other entertainment products that operates both e-commerce and brick-and-mortar stores topped as one of the meme-stocks.
AMC Entertainment is another kid on this corner, with shining amour for its investors, most of who had lost hope when the share plummeted to slightly just above $2.27 per share at the beginning of the pandemic.
GME is up 802.26% in terms of year-to-date performance and who knows what the close of the year might do to GME?
AMC Entertainment is definitely the major one, giving shareholders returns of 1,348.76% in terms of YTD performance.
Pharmaceutical companies are the next kids on this block! The corona vaccine was not an easy time for most companies, say for the big pharma. Johnson & Johnson, Moderna, Pfizer and BioNTech were some of the largest companies that reaped off big in 2021 backed by vaccine mandates.
Their shares equally added the same in investor wealth, with the Pharma stocks being some of the most performing stocks in 2021.
BioNTech SE (ADR Shares) have topped the big leagues with a 235.1% year to date returns (YTD) since the beginning of 2021.
Moderna’s stock has grown by 164% since the year began.
Pfizer has so far given investors returns of up to 61.59% since the year began.
Johnson & Johnson has seen its shares rise by a 7.50% YTD.
Merck & Co joined the party pretty late with a vaccine pill for the coronavirus is one of the very few vaccine makers with negative year-to-date earnings of 1.96%, with a high percentage of that decline realized during the month of November when the company saw a 14.9% decline in shares.
How will 2022 be, with the latest development on the ever-evolving variants of the Coronavirus? The latest is the Omicron variant.
Tech Stocks would be the best winners but they come third in our annual ranking, why? Primarily because they are all a bunch of guessworks gone right, riding on the pack of other stocks. Not all, some of them great, while some are off-worse.
Zoom Video Communications which has been a darling for investors in pandemic times faced a hard one this year. The stock has lost almost half of its share price in one year, at -44.51% as of December 20th.
Apple Inc, the world's most valuable company by market cap has jumped 32.25% in year-to-date performance. The stock has seen lots of competition coming from Chinese manufacturers like Xiaomi but looks like an Apple a day has definitely kept the share declines away, here’s what happened on September 14th.
Almost forgot, Mark, changed the Zuck in Faceboook Inc to Meta! What does 2022 hold for Meta? One thing for sure is the sale of Giphy after the U.K competition watchdog ordered it to sell the firm it had acquired earlier on.
Markets.
The markets have been nice to the dear investors as well. The holy grail of stock market benchmarks, the S&P 500 index has seen a 24.86% growth in terms of year-to-date, the Dow Jones Industrial Average has seen a 17.01% gain as of December 20th.
The Nasdaq Composite index hasn’t been left out, the index has seen a gain of 19.46% while the Russel 2000 index that keeps track of the smallest 2,000 stocks has seen gains of 11.72%
The local markets have had their share of their losses and gains as well, as of at the end of the week, the All-Share index of the Nairobi Securities Exchange stood at 163.64 basis points, a 7.58% year to date gain.
The NSE20 share index currently stands with a loss of 0.74% at 1,854.55 bps while the NSE25 share index has seen a 6.14% gain at 3,594.17 bps in terms of year-to-date performance.
Local market sentiments still remain locked with the markets largest player, Safaricom Plc whose entrance in Ethiopia is seen as facing so many headwinds. Let’s hope for a better year for Safaricom Ethiopia in 2022.
The Closer.
We know this sounds so weird to say, Santa invited us over to Hisa(a) place for Christmas and we will not be able to send the Monday edition to your mail for the remaining part of the year, untill Jan 10th.
We will miss you! Good news, we will be confirming if He’s real or not.
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