A tough year for markets and investors across all asset classes and around the globe was 2022 as negative returns prevailed. Persisting inflation was the main theme globally which pushed all major central banks to aggressive rate hikes. The Russia-Ukraine conflict and Covid restrictions especially in China weighed in all markets.
The Federal Reserve, ECB and almost all major central banks hiked interest rates in an effort to fight the rising inflation.
The majority of assets posted a loss in 2022.
The rise in bond yields pushed the prices of stocks and bonds into negative returns. Commodity prices were a bright spot ending mostly in positive territory.
Almost all major stock indices are in negative territory for the year except the FTSE100 and the Sensex index. The tech-heavy Nasdaq composite is the worst performer with losses of 33% followed by Hong Kong’s Hang Seng stock index with losses of up to 15%.
Dow Jones and S&P 500 both ended the year with losses, -8.58% and -19% respectively. The energy sector was the big winner with gains of 56%, and some of its stocks finished with impressive returns. Occidental Petroleum (OXY) finished the year with gains of 114.83%. Marathon Petroleum (MPC) is up 83% while Exxon (XOM) ended 78.46% higher. Communication Services was the worst performance in the S&P sectors with losses of 40% followed by the Consumer Discretionary sector with losses of 37%.
The disappointment came from the technology stocks. Tesla lost 65% of its value in 2022. Meta Platforms slide 64%, Netflix is down 51% while Amazon lost 49% since the beginning of 2022.
Eurozone stocks are among the hardest hit by the Russia-Ukraine war. Italian stocks are the worst performer, the FTSE MIB Index is down 12% and Germany’s Dax index is down 11%.
Nikkei 225 is almost 9% lower. India’s Sensex index is the top performer stock index with gains of 4.95% for 2022.
In the commodities, silver price with an impressive rally in the last quarter of the year ended 2022 at 26% higher while crude oil closed the year 4.32% higher. Gold reversed heavy losses in the first 10 months and finished 0.37% lower at $1815 per oz.
In fx markets, the U.S. dollar (DXY) despite a pullback in the last months of the year kept the crown with gains of 8.42%. The common currency (EURUSD) finished 6.38% lower at 1.065. USDJPY added 14.84% since the beginning of 2022. The Australian dollar (AUDUSD) lost 6.6% against the U.S. dollar.
The hardest-hit market is the crypto market. Cryptocurrencies faced rising yields and a series of scandals including in November the collapse of one of the biggest crypto exchanges FTX, which shocked the digital currencies market.
Bitcoin (BTC) has lost 64.43 of its market capitalization. Ethereum (ETH) lost 67.79% in 2022. Ripple (XRP) is down 59.31% and Bitcoin Cash is 77.49% lower. Litecoin (LTC) finished 2022 54.56% lower while Monero lost about 37.21% of its value since the beginning of 2022.
Markets Performance in 2022:
Dow Jones -8.58%
S&P 500 -19.24%
Nasdaq Comp -33.03%
FTSE 100 1.74%
CAC 40 -8.10%
FTSE MIB -12.03%
IBEX 35 -4.54%
NIKKEI 225 -9.37%
Hang Seng -15.22%
Commodities Performance in 2022
Crude Oil +4.32%
Forex Performance in 2022
Cryptocurrencies Performance in 2022
Bitcoin Cash – 77.49%
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).