Share prices in the US stock market plummeted dramatically in 2022. The S&P 500 index, a leading benchmark for US stocks, closed 19.44% lower over the last 1-year period. The first trading day in 2022 was January 3 when the S&P 500 closed the session at 4796.56, while on the year’s last trading session (December 30), S&P 500 closed at 3,839.50 levels, 957 points lower. The 52-week range for S&P 500 remains 3,491.58 – 4,818.62. On January 4, the index touched a high of 4,818.62 in intra-day trading.
Overall, 2022 remained a lackluster year for investors, especially for those with portfolios concentrated on FAANG and other blue-chip stocks. The energy sector stocks remained the only saviour for the market investors all during the year.
12 S&P 500 stocks ended the year with gains of over 50% while Occidental Petroleum Corporation and Hess Corporation were the top performers of S&P 500 clocking 117% and 91% respectively.
Among the top losers of 2022, some of the blue-chip names like Tesla, Meta (Facebook parent) fell heavily during the year, losing over 60% in 2022. Investors in stocks of PayPal and Warner Bros also saw losses during 2022. Netflix, NVIDIA, Amazon, Intel, The Walt Disney, and many other top stocks of the US stock market also shed between 15 and 50 percent.
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The S&P 500 is frequently cited as the top indicator of large-cap U.S. stocks. So, going forward, what should investors expect from S&P 500 to close in 2023 end? Jose Torres, Senior Economist at Interactive Brokers, here, talks about much lower levels. Similarly, many other analysts expect a dull year for stocks in 2023 as well. Analysts at Morgan Stanley are also of the view that the index will see a fall before rebounding by 2023 end.
How quickly the landscape changed in early 2022 shows the predictions may not hold true when it comes to stock prices or index levels. The sentiments in the US stock market may revolve around corporate earnings, the US fed rate path, and recession.
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How optimistic are investors and traders about these may decide the next leg for the market? “Current trends in rates and macroeconomic indicators show S&P 500 earnings are likely to fall in the year ahead, despite consensus still being generally positive,” says Siddharth Srivastava, Head – ETF Products, Mirae Asset Investment Managers (India).
But, remember, markets are always forward-looking and any positive indications about the economy may propel stocks into a higher trajectory. The volatility may remain high but long-term investors may continue looking for opportunities among top sectors and stocks.