Wall Street brushes aside its worst year since the 2008 crisis with slight declines

Wall Street brushes aside its worst year since the 2008 crisis with slight declines

Steady rate hikes by the Federal Reserve (Fed) to rein in runaway inflation and cautious investors anticipating a recession in 2023 have been the dominant trend throughout 2022 on the New York trading floor, which has finished his worst year since 2008 financial crisis. And he dismissed it with a session of light falls, which put the finishing touch to this eventful year 2022 for Wall Street.

After operations on Friday on the Big Apple Stock Exchange, its main index, the Dow Jones, fell slightly by 0.22% to close the year at 33,147.25 points, while the selective S&P 500 gave way. 0.25% to 3,839.50 points. The Nasdaq, which includes the largest technology companies in the country, fell 0.11% to sign 10,466.48 points.

In the overall calculation for the year, the three major Wall Street indexes ended down. The Dow Jones accumulated losses of 8.8%, but the fall of the S&P 500 (-19.4%) was more acute. However, the worst was taken by the Nasdaq (-33%), now in disarray after years of meteoric rise.

According to the analysis firm Fidelity, almost all business sectors ended the year in the red, first of all those of the communication (-41%), the non-essential goods (-37%) and the Technology (-29%), which includes some of the most affected, such as You’re here (-65%) and Purpose (-64%).

The exception was the sector of energywho jumped 56% alongside the rise in oil and gas prices, especially after the start of the war in Ukraine and, despite their contribution to inflation, left succulent profits in the accounts of their companies.

Inflation, determinant

One of the determining factors in the drop in the American market was the inflationthought to be short-lived but which exploded at its the highest level in 40 yearspeaking at 9.1% in June, and led the Federal Reserve to aggressively raise interest rates from March.

Inflation has started to subside and the labor market does not seem to be suffering at the moment, but the central bank, which slowed the rate hike last December, Unemployment is expected to rise in 2023and the shadow of a recession has sown fear in the markets.

Investors have been alert to signs that generally anticipate a recession, such as the inversion of the government debt yield curve, in which a lack of confidence in the situation translates into a greater profitability of short-term papers compared to long-term ones.

Apart from the stock market crash, it was one of the worst years in memory for fixed income and it was also marked by great volatility in raw materials and by the strengthening of the dollar against other currencies, underlines in a note César González, financial director of Avanza Previsión.

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