Summary：2022 has been a tough year for most countries. This article reviews eight top financial events that influenced the U.S. stock market most.
We had seen one problem after another for the U.S. financial markets in 2022. The stock market remained volatile sharply, with crashes and delistings throughout the year. All these phenomena were influenced by the major events of industry, government, globe. Here are 8 key events that influenced U.S. stock market most in 2022.
#1. FB Renamed To META
In January, FB announced a name change to META and their shift in focus to Metaverse. The name change, which was announced at the Facebook Connect augmented and virtual reality conference, reflects the company’s growing ambitions beyond social media. However, the new metaverse conversion didn't pay off. Its stock price has dropped 60%, losing the market value of approximately US$650 billion.
#2. Elon Musk Takes Twitter Private
Elon Musk initiated the acquisition of American social media company Twitter, Inc. on April 14, 2022, and concluded it on October 27, 2022. Elon Musk has finally completed his US$44 billion deal to acquire Twitter and take it private, forcing Twitter to be delisted from NYSE.
#3. Invasion Of Ukraine
There are few better words than volatile to sum up the Ukrainian conflict over 2022. This was certainly the experience with the stock market. Back in March, Time reported on investors bailing on stocks, sending the S&P 500 index crashing by 8%. There were ongoing concerns over Russian stocks. Meanwhile, gas and food prices began to soar, as did gold. Back in Feb, defense stocks such as Raytheon Technologies (NYSE:RTX) and Lockheed Martin Corp (NYSE:LMT) has benefitted greatly from the war where its Y-o-y stock price has raised by 37% and 16% respectively.
#4. China To Delist Companies From US Stock Exchange
This was a major moment in financial relations between China and America in 2022. There are concerns over the isolation China imposes upon itself through the massive split from U.S. exchanges. Five of the largest state-owned companies left U.S. exchanges in August. This includes China Life Insurance & PetroChina Company Limited, mainly due to the noncompliance of the sharing of Chinese companies' auditing review data with US regulators
#5. Cryptocurrency Market Going Downhill
Losing over $2tn, the crypto industry is now only worth around $900bn. Bitcoin has been down 75% over the past year. The industry is in bad shape, and the stock markets can’t help but rise and fall alongside it. Collapse of TerraUSD where they wipe off $200bn market cap in a day. FTX was hacked $500 million, and its founder, Sam Bankman-Fried was arrested for fraud.
#6. America Sees Rises And Falls Across 2022
Statistics from Statista show this rise in the inflation rate was already underway more than a year ago. But, a rate of 5.4% in September 2021 compared with 8.2% in 2022 is quite a jump. Thankfully, rates are dropping again. The peak came in June at 9.1%. We can’t expect this dip to go on forever, but at least we’re over the worst of it.
#7. The Curve Raises Red Flags In October
The U.S. Yield Curve is an important indicator for the health of interest rates, and experts watch for an inversion, where short rates rise above longer rates. This inversion has become more pronounced through 2022. End 2022, the 3-month treasury yield and 10-year treasury yield was 4.22% and 3.51% respectively. A greater shorter term yield reflects the low confidence in investors in terms of long-term interest rates and usually implies that there is a impending recession.
#8. Fastest Rate Hike Cycle
The issue of interest rates in America has been a major talking point for months, fed increase interest rates 7 times. Since the start of 2022 to the end of 2022, fed fund rates increased from the range 0-0.25% to 4.25%-4.5%. This is known to be the most aggressive monetary tightening policy taken by the fed in more than 40 years when fighting inflation.
Source: CNBC, Investopedia, Dollarsandsense
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