The S&P 500 index, widely regarded as the flagship of the entire stock market, has fallen nearly 25% as of September 2022. This drop marks a quick reversal from the soaring share prices in the post-pandemic bull market of 2020 and 2021.
However, not all stocks are in a downward spiral. The oil and energy industry is the biggest market leader in the S&P 500 this year, while tech companies are struggling to hold their ground. Financial market experts at your back CMC Marketsonline trading platform commented on the biggest winners and losers in the S&P 500 as of August 2022.
Energy stocks are an amazing sponsor of global conflict
The first two quarters of the year were met with social unrest due to various global issues, including the conflict between Ukraine and Russia, fuel shortages and a cost-of-living crisis. The impact of such world events on the stock market varies from country to country, and some industries do better than others.
Energy prices have risen in recent months and demand for crude oil remains strong despite supply chain challenges.
Occidental Petroleum (OXY) is an American hydrocarbon exploration company that benefited from higher prices and a 126.8% increase in demand. Warren Buffett also recently purchased just under seven million shares of OXY, which could also have driven the price up.
Coterra Energy (CTRA) and Hess (HES) shares rose 61% and 51.9%, respectively.
Both companies’ earnings hit new highs in the first half of 2022 as they benefited from the fuel crisis. According to CMC Market experts, some oil and gas companies boast impressive dividend payouts, which could make them even more attractive to shareholders.
Solar panels and residential batteries have been in high demand since the announcement of rising electricity bills across Europe. Enphase Energy (ENPH) had an outstanding sales year, with sales in Europe up nearly 70% in the second quarter. Its shares are up over 55%.
In addition, upstream oil companies such as ExxonMobil (XOM) benefited significantly from higher crude oil prices in the first half of the year. The oil giant’s share price is up 58% in 2022.
Technology stocks perform worst in 2022
Since the boom of the pandemic, many tech companies have struggled to get out of the crisis as life has returned to normal. Rampant inflation and worries recession have also slashed consumer discretionary spending budgets as they focus on essentials such as products and rent.
One example of this is Netflix (NFLX). This is the biggest loss in the S&P 500 this year with a sharp drop of 62.7%. As the number of people staying at home has declined since the pandemic, it has become difficult for Netflix to retain and attract customers.
The technology company also announced an increase in the monthly subscription price in April this year. The news caused a stir on social media and may have contributed to the price drop.
The second biggest loser in 2022 is orthodontic device maker Align Technology (ALGN), known for its Invisalign brand of clear aligners, with a 57.2% drop.
CEO Joe Hogan cited the fact that customers may forego certain luxuries, such as discretionary health products, during difficult times. This trend may explain the drop in the share price and the recent drop in sales figures in 2022.
British-American cruise operator Carnival Corporation (CCL) has recorded a 55% drop in its share price in 2022. Like many other industries, the cruise ship industry has been hit hard during COVID and has been unable to bounce back due to excruciating debt.
PayPal (PYPL) is another big name that has lost a huge amount of value, losing 54% of its stock value in 2022. Former PayPal CFO John Rainey has announced that he will join Walmart in June. It is not uncommon for stocks to drop when key figures leave a company because of a threat to management’s stability.
For the first time in its history, Facebook is facing a decline in active daily users. Parent company Meta Platforms (META) is down nearly 53% this year. The return to semi-normal post-COVID and the rise in popularity of other social networks like TikTok could be behind the drop in user numbers.
Return to ‘normal’ daily life underpins stock market turmoil
Michael Hewson, Principal Market Analyst at CMC Markets, said: “After several turbulent years in the market due to COVID-19, many stocks in the market have suffered negatively while others have thrived during periods of social unrest.
“Obviously, these energy promotions are working very well, which is a direct result of what has been happening around the world over the past eight months. However, because of this, it is likely that these percentages will drop by this time next year.
“On the other side of the coin, tech companies like Netflix, which flourished during the pandemic, are starting to see the effects of declining demand. People are back to travel, socialize and commute, and that would definitely affect the share price of some companies.”
More from Rich Nickel:
Andrew Herrig is a financial expert and financial nerd, and the founder of Wealthy Nickel, where he writes about personal finance, part-time jobs, and entrepreneurship. As an avid real estate investor and owner of several businesses, he has a passion for helping others create wealth and shares his family’s experiences on his blog.
Andrew holds a Master’s degree in Economics from the University of Texas at Dallas and a Bachelor of Science degree in Electrical Engineering from Texas A&M University. He has worked as a financial analyst and accountant in many aspects of the financial world.
Andrew’s expert financial advice has been featured on CNBC, Entrepreneur, Fox News, GOBankingRates, MSN and more.
