Financial markets have already exhausted 2021 of the long-awaited economic recovery. However, uneven success in fighting the pandemic has prevented a widespread rally in investment assets and also a return to the old financial normality.
The year has passed from panic ensued with the appearance of each of the new variants to the hope sparked by the approval of each new drug to combat the deadly virus. Thus, the price lurch has not been lacking despite a much more restrained volatility than in 2020.
The bottlenecks in the supply chain have caused more than one tightening of prices in raw materials. The central banks have rethought their roadmaps. And investors have delved into the new and almost forced dynamics that debuted just a few months ago.
1) Ibex 35: The Spanish stock index par excellence has closed 2021 with a rise of 7.9%. Very far from the forecasts that analysts made a year ago and 16% of their prices prior to the outbreak of the pandemic. And it is that, the selective has returned to become for the second consecutive year in the red lantern from among its European neighbors.
The comparison with other indices in the region is painful. And whether the reference is established against selectives of the central economies of the Eurozone as if it is done with those considered peripheral. Two examples: the German DAX closed 16% higher and the Italian Ftse MIB scored 23% progress.
2) Rovi: The pharmaceutical company has been, without a doubt, the revelation value of the Spanish market. With a revaluation of 94.7% in the year, it has not only led the table in the Ibex 35, but has also achieved the second position in the Continuous Market as a whole. Only behind eDreams Odigeo (+ 133.5%).
The impeccable financial record of the laboratories has been reinforced in recent months by their partnership agreement with Moderna to produce its vaccine against Covid-19 in Europe. An impulse that investors have appreciated by formulating more bets and at a higher price for the company, which thus achieved join the king index of the Spanish stock market in its last revision of the year. And unseating a historical one like Viscofan.
3) S&P 500: If last year was the Nasdaq, this has been the broad index of the New York Stock Exchange. The rotation of investment positions from technology to sectors with a more cyclical cut and value it has been the engine so that up to 70 historical records have been scored one after another throughout the year.
With an accumulated revaluation of 28% – in the absence of what it does in the reduced session of New Year’s Eve – the S&P 500 points to finish a year for the first time beyond 4,800 points. An upward path in which he has not been alone, as the Dow Jones has added 19% to its graph and the Nasdaq, far from retracing its 2020 rally, has accumulated another 28%.
4) Apple: The technological giant par excellence has once again been a protagonist in the US market. The iPhone manufacturer firm has managed to maintain its business figures with the launch of new devices and thus has peered into the rare capitalization of $ 3 trillion.
The figure, hitherto unknown in the stock market, requires a price per share of $ 182.85, a level that has resisted. However, the figure is just one step away just 16 months after reaching 2 trillion in stock market valuation and only three years after first trading above one trillion.
5) GameStop: The well-known chain of video game stores has undoubtedly been one of the revelations of the year. Chosen by hordes of small investors to start a wave of speculative attacks on small listed companies in low hours, has been the germ of a new operating strategy in the markets.
The now known as the formula of the ‘meme stocks‘has been the result of leading speculation in the ‘chicharros’ of all life to its maximum expression. Between annual minimums and maximums, GameStop has left a range of 2,728% and many of its business problems are still pending to be solved by a restructuring plan that does not stop running into obstacles to its execution.
6) Evergrande: Once again it has been fulfilled that when china sneezes, the rest of the world catches a cold. The rumors that by September that the main real estate developer in the Asian country was practically on the verge of a technical bankruptcy due to its high indebtedness – of more than 300,000 million dollars – caused all markets to tremble.
Beijing’s swift handling of the situation meant that the Evergrande sinking never materialized. Even after having entered into default due to the impossibility of meeting the coupon of some of its bond issues, complacency quickly set in in the market. Everything has been, for now, in a scare.
7) Tapering: Central banks have been one of the key players in the complicated balance that has sustained the fragile economic recovery on a global scale. After having brought out the heavy artillery in 2020 to face the worst consequences of the pandemic, in the final stretch of the year they have begun the withdrawal. At least in his speech.
This step back is what is known as tapering. A winding path in which large monetary institutions must measure each step well to avoid a breakdown of the economy or, on the contrary, its overheating. Although at the moment no one is considering thinning the bulky balance sheets that have accumulated after years of continuous financial risks.
The Bank of england It has been one of the most determined, having already proceeded with its first rate hike since Covid-19 crossed the borders of Europe. Meanwhile, the US Federal Reserve (Fed) has slowed down its buying rhythm and proposes three hikes in official rates for next year. The European Central Bank (ECB) has only proposed a softening in its purchases and has indicated March for the expiration of its emergency PEPP program.
8) Copper: The coppery metal has acquired a special shine throughout this 2021. The supply bottlenecks Caused by a limited supply due to the stoppage of activity in many mines and by an aggressive stockpiling of raw materials by industrial factories, this has resulted in an increase of 25%, although by May it reached 40%.
The vertical increase in the prices of industrial raw materials like this one and in energy costs has been the engine that has accelerated inflation to unknown levels in three decades and has thrown central bank policies into trouble. And the imbalances caused after a year and a half of the pandemic threaten to continue to distort prices.
In the specific case of copper, demand has also been strengthened by the boost to green energies. From the International Renewable Energy Agency (Irena) they calculate that the global demand for copper could double by 2030 and almost triple in 2050.
9) Bullion: Precious metals investors got some good news in the final stretch of the year. Spain joined for the first time countries that issue gold coins with investment status: the precious bullions. Only 12,000 pieces will be issued with a face value of 1.5 euros but a market price close to 1,800 euros.
Despite this, gold has shone less strongly this year. Confidence in the economic recovery and the general good tone of equities resulted in more modest investment flows towards the precious metal, which ended the year with a 5.8% wear in its price. More than $ 300 from its all-time highs August 2020.
10) Dogecoin: After the emergence of a year ago, cryptocurrencies have consolidated as another asset in the portfolios of many investors. The bitcoin has remained king, but the search for new investment opportunities has opened the sights towards other digital currencies such as dogecoin.
The currency, born as a parody of inflation in traditional monetary systems, has become the favorite speculation vehicle of many investors. And a good number of them have come to her by following in the footsteps of Elon Musk, because the founder of Tesla has become one of its great diffusers.
Throughout 2021, dogecoin has accumulated a resounding appreciation of 3,650%. From $ 0.004670 last New Year’s Eve to $ 0.175 that was fired this year. Incontestable.
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From dogecoin and GameStop to ‘tapering’ and Evergrande: the 10 keys to the market in 2021