Whether for its ups or downs, 2022 was certainly one memorable year for the market as volatility across a plethora of sectors materialized. And while some markets failed to grapple with 2022’s numerous hurdles, others rose in the face of them.
Accordingly, this article recaps how the different market sectors in 2022 have fared, lists the market winners and losers, and examines how Plus500 traders approached some of 2022’s markets using data from the +insights exclusive and valuable trading CFD data feature.
2022’s World Events Summarized
This year, the economy took a turn for the worst due to the Russian invasion of Ukraine which happened on February 24, 2022, and took the markets by surprise. In addition, inflation peaked at an all-time high in the US and the Eurozone causing many central banks to raise interest rates which, in turn, led to increased recession fears, layoffs, and market selloffs.
To top things off, increased pandemic restrictions in China exacerbated the market turmoil, on the one hand, while the return to normalcy in other parts of the world generated more opportunities and boosted some market sectors, on the other hand. Therefore, markets were ostensibly volatile in response to this cocktail of events.
What Is +Insights?
+Insights is an exclusive, free and valuable feature available only to Plus500’s traders. Using this feature, traders may gain insight into topics such as the most traded instruments, the most profitable markets, and the most bought and sold instruments and answer some of the most asked trading questions like “What was the most sold Commodity last week?”, “What was the record return on Forex trade last month?”, and “What was the most followed index throughout the year amongst Plus500 global traders?”
Winners: 2022's Best Performing Stocks
The Energy Commodity Sector Wins
This year while many market sectors failed to keep pace with the economic turmoil the war in Ukraine brought with it, the energy sector may have benefited. Since Russia is considered Europe’s largest energy exporter, jitters surrounding the availability of energy resources in Europe arose.
Moreover, for the first time since 2008, commodity trading was substantially boosted year to date and reached $130 for the first time. Analysts seem to attribute this boost to the geopolitical uncertainty surrounding Russia and Ukraine, and as such, as long as the conflict persists, fears regarding the insufficiency of energy sources will probably keep pushing oil prices up.
Therefore, it might not come as a surprise to learn that despite the economic hurdles, energy and commodities-related stocks like Hess Corporation, Exxon Mobil, Steel Dynamics, Inc, and First Solar were some of the best-performing stocks in 2022. Consequently, it seems that the energy market’s volatility has generated hype in the Plus500’s trading community as it appears that according to +Insights data, this year’s most sold instruments were Oil in the first place and Natural Gas in the third. (Source:JP Morgan)
Hess Corporation (HES) is an American energy company specializing in exploring and producing Crude Oil (CL) and Natural Gas (NG). The company was among 2022’s biggest winners as it has been on a distinct upward trajectory throughout 2022 skyrocketed by 80.4% up till the time of the writing.
Furthermore, perhaps not surprisingly, the company beat analyst predictions when it reported its quarterly earnings results on October 26th, 2022 as well as surpassing estimates in 3 of its 4 earnings reports throughout the year.
Steel Dynamics, Inc.
Steel Dynamics (STLD) as the name entails, is an American steel producer based in Indiana. While this company is not necessarily an energy company, it is also one of the stocks affected by the Russia-Ukraine conflict. Following the Russian invasion of Ukraine, steel prices spiked due to concerns about supply issues. And because Russia and Ukraine are considered to be major steel producers and suppliers and due to disruptions in supply chains, the conflict resulted in an increase in steel input costs. Consequently, these concerns also lifted Steel Dynamics’ price by 62% as of the time of the writing. (Source:Nasdaq)
Exxon Mobil Corporation
Another energy-related stock, Exxon Mobil (XOM)is an American multinational Oil and Gas company that also seems to have benefitted from the geopolitical unrest over 2022. The energy giant has ascended by 70.5% since the beginning of the year up till the time of the writing. Some even called Exxon Mobil one of the biggest gainers of the energy crisis brought about by the Russia-Ukraine war as it also reported record gains in the energy sector and according to market analysts might continue to do so as long as the geopolitical tensions continue.
A leader in solar panel production, First Solar (FSLR) is an American supplier of utility-scale PV power plants and related services. It may not be surprising to find out that, as people search for alternative energy sources, the solar-energy sector has been in more demand in light of the energy crisis, in general, and the one exacerbated by the war in Ukraine and the sanctions on Russian energy in particular. Additionally, it was noted that many people were searching for solar panels after the destruction of Ukraine's energy facilities. The International Energy Agency (IEA) also reported that it believes that solar power will likely replace coal in 2027. Accordingly, the projected growth is already evident this year as solar-focused companies like First Solar soared by 65% from January 3rd up till the time of the writing.
Losers: 2022’s Worst-Performing Stocks
Tech Stocks’ Dreary Year
Among this year’s worst-performing stocks are tech stocks. This is because the tech sector failed to keep pace with the rising inflation and higher interest rates this year since investors shy away from tech stocks and opt for safe-haven assets instead. This is why layoffs and hiring freezes across the broad spectrum of big-tech companies made the headlines numerous times this year. Nonetheless, the broad selloffs in the tech sector seem to have worked in the favor of the energy-heavy index, the Nasdaq (US-TECH 100) which was the 3rd most traded instrument and second most bought one on Plus500’s platform in 2022.
One of the most prominent losers this year is probably Meta (META) which wiped over half of its value from the start of the year up till the time of the writing. While it was reported that Meta had a market capitalization of $1 trillion in 2021, placing it among the top 5 companies by market cap, following high inflation rates, underwhelming earnings reports, and a revenue loss report on the 26th of October, the social-media mogul descended from its previous highs. According to +Insights data, Meta was among the top most-sold stocks on Plus500.
American social media and camera company, Snap (SNAP) is another tech stock to have taken a hit in 2022 by erasing a whopping 81.6% of its value since the beginning of the year. This substantial loss can be traced back to the fact that many ad-reliant stocks like Snap and Meta had to grapple with Apple’s (AAPL) privacy protection program which made creating a tailored experience challenging. In addition, the pressure weighed on it by inflation, rising interest rates, and the Ukraine war, weakened Snap further as advertisers had to cut back on ad-spending to grapple with the aforementioned setbacks. While Snap slid this year, it seems that to Plus500’s traders it was one of the top 10 most-profit-making positions.
One of the biggest names in tech specializing in semiconductors and GPUs, NVIDIA (NVDA) lost 53.3% of its value from January up till now.
The decline is derived from NVIDIA failing to sell off its backlog of 3000 series graphics cards, while its new 4000 series sales have been mediocre, In addition, the return to normalcy after the COVID outbreak and the fall of the Crypto sector created a weaker demand for GPUs, thus leading to NVIDIA’s fall. Nonetheless, in the past month and a half, the microchip giant seems to be recouping some of its losses as it has risen by about 12% since the beginning of October up till the time of the writing.
As 2022 nears its end and with the approach of 2023, one is left to wonder whether inflation, recession, the war, and rate hikes will continue to take a toll on the markets in the year to come. While in the meantime it seems that these aforementioned hurdles may continue to persist throughout 2023, one thing is for certain is that the markets are volatile and ever-changing. In any way, Plus500 traders may refer to +Insights data in order to keep an eye out for 2023’s upcoming market moves.
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