Wall Street in the throes of sells in the early hours of the last session of 2022: a year to forget for the US stock market, and not only that, given that the sales were fierce against various asset classes.
For now, Wall Street is not replicating the desire for a rally that peeked out in yesterday’s session, leading the Dow Jones Industrial Average to rebound by 345.09 points, (+1.05%), the S&P 500 to rise by 1, 75% and the Nasdaq Composite to mark a gain of 2.59% to 10,478.09.
At 16.10 Italian time, the Dow Jones dropped almost 240 points (-0.68%) to around 32,995 points, the S&P 500 fell back by 0.81% to 3,817, while the Nasdaq dropped 1.11% at 10,360.
For the Nasdaq, the S&P 500 and the Dow Jones, 2022 is confirmed as the worst year since 2008, in the wake of the obsession-fear of galloping inflation in the United States and further interest rate hikes by the US Fed Jerome Powell.
Looking at each of the main indexes of the US stock exchange, the Dow Jones finished the fourth quarter of 2022 with a leap of 15.65%, after three consecutive quarters of losses.
On a year over year basis, the Dow outperformed Wall Street, limiting the damage to an 8.58% YTD (year to date) decline.
However, the index broke a three-year uptrend, posting its worst year-on-year performance since 2008, when it slid 33.84%.
The S&P 500 lost 5.66% in December, interrupting the bullish trend of the previous two months. On a quarterly basis, the list rose by 7.35% in the fourth quarter of 2022, after three consecutive quarters of declines. Since the beginning of 2022, the loss has been 19.24%.
Even the S&P 500, on an annual basis, is ready to interrupt a positive trend that lasted three years, reporting the worst performance since 2008, when it plunged by 38.49%.
Annus horribilis for the Nasdaq Composite. In December, the index dropped 8.63%, interrupting a bullish trail that lasted two months.
On a quarterly basis, the technology stock lost 0.92% and is heading for its fourth consecutive quarter of losses, for the first time since 2001.
Since the beginning of the year, the Nasdaq has plunged 33.03%, as well as the Dow Jones and the S&P 500 breaking the buy trend of the past three years, and reporting the worst loss since 2008, when it suffered a 40 .54%.
However, the positive performance of the Dow Jones and the S&P 500 on a quarterly basis during the fourth quarter of 2022 should be highlighted, which gives hope for a comeback, perhaps, in 2023.
Among the Big Techs, Tesla performed badly, dropping 68% since the beginning of the year; Meta follows among the hi-tech mega caps with a 66% drop, while Amazon was the third worst Big Tech on the stock market in 2022, losing about half of its value.
AMZN stock plunged 51% on the Nasdaq, posting its worst annualized loss since the 2000 dot-com crash, when it plunged 80%.
Amazon’s capitalization breached the $1 trillion mark, slipping to $834 billion from $1.7 trillion at the start of the year.
The fear of an even more aggressive Fed on rates, due to inflation in the US that remains well away from the US central bank’s target, equal to 2%, translated into a jump in Treasury yields, which was mainly paid for from growth stocks.
Today, 10-year Treasury rates exceed the 3.9% threshold, getting closer to the 4% threshold which was largely breached during the year. The rates on 2-year US Treasuries, which are more sensitive to monetary policy decisions, rose to 4.409%. Fears of still stubborn inflation in the US and a more hawkish Fed are being felt in the fixed income market, as it has been throughout the year.