The US Stock Market: Best and Worst Performing Sectors in 2022
The markets in 2022 were characterized by much more pain than gain.
In the US, the Fed raised interest rates seven times. Globally, central banks raised interest rates for the first time in years to combat rising inflation. Russia’s invasion of Ukraine and China’s COVID Zero ambitions led to further disarray in markets and supply chains.
To recap the last 12 months, we’ve created an augmented version of the classic FinViz Tree DiagramShowing the final figures released by the top US-listed companies, sorted by sector and industry.
Below, we take a closer look at the most companies that finished the year in the red, and the few industries and companies that beat the odds and saw positive growth.
In this year’s stock market visualization, there is much more red than green. That said, there were winners to be found, even during this turbulent year. Here are some of them:
Looking at the visualization above, it’s easy to see which sector dominated this year. In fact, energy was the only sector that experienced positive performance, with most major energy stocks experiencing double-digit growth.
In particular, exxonmobil had a monstrous year. The energy giant’s record third-quarter profit came close to matching Apple’s (no small feat), and the company reportedly handed out hefty pay raises and stock options to staff. This success did not go unnoticed as Exxon and industry peers like Chevron came under fire for setting profit records as consumers felt pressure at the gas pump.
Medical care (more or less)
The healthcare sector was mixed this year, but some winners emerged.
Large-cap pharmaceutical companies managed to stay strong, even as markets languished. Merck led the way with +45% growth this year, with Novo Nordisk, AstraZeneca, AbbVie and Eli Lilly (+32%) also posting double-digit growth. For the last two companies, this is the continuation of a long-term trend. Over the last decade, AbbVie is up more than 600% and Eli Lilly is up more than 800%.
Pfizer (-12%) is the notable red dot in a green industry. The company had such a strong couple of years that the drop in 2022 is hardly surprising. It’s worth noting that the company still has billions in cash, and its oral antiviral tab could become a big sales driver over the next year.
The big three companies in the medical distribution industry, McKesson (+50%), Cardinal (+47%) and AmerisourceBergen (+24%), also had a strong year.
Large Aerospace and Defense Companies
Major aerospace and defense stocks, with the exception of Boeing, outperformed the broader market in 2022.
Northrop Grumman (+41%) posted healthy profits, driven by its space segment. The company will be busy building rocket boosters that will help put Amazon’s more than 3,000 communications satellites into orbit for years to come.
Lockheed Martin (+38%) capped off a strong year with a good half a billion dollars US government contract
2022 was the worst year for the S&P 500 since the 2008 financial crisis. While markets usually end up, down years can happen. Last year was one of those rare times.
Unlike the winning side of the equation, there is no shortage of material to cover in this section. We’ve scanned the Red Sea looking for sectors to dig.
The technology sector, from semiconductors to software, saw sharp declines across the board last year.
The list below, showing the biggest declines in the S&P 500, puts into perspective how much value was shed in the tech sector this year.
|Business||Heart||Market capitalization change (2022)||% Change (2022)|
|walt disney||DIS||-$123 billion||-44%|
|Sales force||CRM||-$118 billion||-48%|
In absolute terms, Apple it is the year’s biggest loser, losing $846 billion of its market capitalization. Goalwhich is in the midst of building out its vision of a “metaverse,” also experienced one of the biggest declines, losing $464 billion in market capitalization.
Semiconductor stocks such as NVIDIA (-50%) and TSMC (-38%) were hit particularly hard.
The so-called crypto winter, the collapse of NFT transactions and even more FTX collapse, spelled hard times for any company that specialized in cryptography. Although Coinbase avoided major controversy last year, its shares still took a hit, falling 86% on the year.
The past year posed many challenges for American automakers.
Macroeconomic issues aside, simply being able to get new vehicles off the assembly line proved challenging as supply chain issues persisted.
tesla saw 40% growth in deliveries last year, but that wasn’t enough to satisfy investors. Shares of the automaker have slumped since September and ultimately ended down 65% for the year.
Other pure EV companies fared even worse. Rivian and Lucid experienced massive drops of over 90% over the course of the past year.
Real Estate Investment Trust (REIT) stocks have lagged the general market due to sky-high interest rates and uncertain economic circumstances.
This was in stark contrast to 2021when REITs had one of their best performances.
Although most of this sector is made up of REITs, We work is also in the mix. The previously high-flying company experienced one of the steepest declines, ending the year down more than 80%.
Many experts believe a recession is looming, with severity and duration being the main topics of debate.
Other questions also remain. Will the technology sector continue with mass layoffs until 2023? Will supply chain problems persist? Will offices slowly come back to life, or has remote work drastically altered the commercial real estate equation? Will the conflict in Ukraine continue or will it be resolved?
If there’s one thing we’ve learned in the last three years, it’s that predicting the future isn’t easy.