Pain, few gains for investors as markets slumped in 2022
Investors found few, if any, places to safely put their money in 2022, as central banks in the
Uncertainty about how far the
Russia’s invasion of
On
Borrowing money got more expensive. The 10-year
Still, climbing yields in the
Cryptocurrency investors weren’t spared either. Bitcoin shed more than half its value and a number of high-flying companies wound up in bankruptcy court.
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Here’s a look back on the key events in markets for 2022:
INFLATION AND THE FED
Inflation was the dominant global economic theme this year. Gasoline prices in the
Central banks' response to inflation overshadowed financial markets in 2022 and could very well do so again next year. As the year began, officials at the
Still, it wasn’t until March, when the
Inflation in the
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For full coverage of the global economy, go to https://apnews.com/hub/economy
THE BEAR ROARS
Wall Street’s brutal year left few stocks unscathed, and the vast majority fell into a bear market under the weight of fast-rising interest rates.
After peaking on the very first trading day of 2022, it took about six months for the S&P 500 to drop more than 20%. The biggest losers were the stocks that had performed the best in the rally that followed the coronavirus crash.
Back then, high-growth tech stocks roared the highest thanks to the juice provided by super-low interest rates. But in the cold light of 2022, those stocks suddenly looked the most expensive and the most vulnerable as the Fed hiked interest rates to their highest level in 15 years.
The pain did not discriminate much, though. Seven out of 10 stocks in the S&P 500 fell in 2022, as of
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BOND MARKET BLUES
It was one of the worst years in history for bond investors.
Decades-high inflation meant the fixed payments coming from bonds in the future won’t buy as many groceries, gallons of gasoline or whatever else is rising in price.
The Federal Reserve’s decision to raise interest rates also hammered bond prices. Because newly issued bonds were paying more in interest, the older bonds sitting in many investors’ portfolios were suddenly much less attractive because of their lower yields.
The largest bond fund by assets, one from Vanguard that tracks the broad market, had lost 12.5% in 2022, as of
Historically bonds have held up better than stocks during downturns, offering some cushion for investors, but both tumbled in 2022.
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HOUSING MARKET SLUMPS
As 2022 began, the nation’s housing market was still running red hot.
House hunters competed for the fewest homes for sale in more than two decades, fueling bidding wars that pushed prices sharply higher. The average rate on a 30-year mortgage was slightly above 3%, near historic lows.
Then mortgage rates started to climb, spurred by expectations of higher interest rates as the
Higher mortgage rates combined with still-rising home prices make it difficult for many would-be buyers to afford a home. Sales of previously occupied
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IS
You can't blame
CEO
Most of Musk’s wealth is tied up in
After buying Twitter in October, Musk has cut half its staff and picked fights with public officials and others.
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For full coverage of
CONSUMERS FEEL THE PINCH
The highest inflation in four decades is hitting consumers right in their wallets.
Households — especially at the lower end of the income spectrum — are likely depleting savings built up during the pandemic, with more pain to come should the economy tip into a recession. Credit card debt ballooned and rents rose in 2022, although there are signs housing costs will be coming down. While
Wages went up, although not at the same pace as inflation. Aggressive rate hikes by the
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For full coverage personal finance got to https://apnews.com/hub/financial-wellness and https://apnews.com/hub/personal-finance
Russia’s invasion of
European prices for natural gas rose to 17 times their prewar levels after
Global oil prices spiked as Western buyers shunned Moscow’s crude, sending Brent to over
Meanwhile record wheat prices spurred disastrous food inflation in poor countries.
By year end, lower prices for oil, natural gas and electricity had provided a bit of relief for drivers and homeowners.
To see full coverage of the
China’s economic growth and stock market slid in 2022 under pressure from pandemic controls and corporate debt, prompting the ruling
The world’s second-largest economy shrank by 2.6% in the three months ending in June compared with the previous quarter after
Forecasters say annual growth might fall below 3%, among the lowest in decades. To cut the economic drag, the ruling party ended testing for millions of people and stopped requiring supermarkets and other businesses to track the health of employees and customers.
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To see full coverage of developments in
CRYPTO'S WILD RIDE
The year began with bitcoin above
With the steady, steep decline of crypto prices in the background, the dominoes began to fall with the collapse in May of Terra, a so-called stablecoin. Investors lost tens of billions of dollars and a number of crypto companies faced financial ruin. In stepped
Those plaudits evaporated when FTX unraveled in November. Questions about its financial strength prompted customers to request large withdrawals. Overwhelmed and, it turns out, underfunded, FTX filed Chapter 11 bankruptcy protection on
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To see AP's full coverage of the cryptocurrency industry, go to: https://apnews.com/hub/cryptocurrency
THE STREAMING WARS
Netflix,
Streaming services had to contend with a return to normal for many people who had been stuck at home because of lockdowns or other restrictions during the height of the COVID-19 pandemic. The sheer number of streaming options also left companies in a fierce fight for viewers' attention.
Streaming giant Netflix lost about half of its value after a steep drop in viewers in the year's first half.
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Inflation proving to be stickier than the Fed bargained for
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