The 2021 Stock Market: Winners and Losers
2021 has been a strong yet wild year for investors, as macro trends with the reopening of the global economy following the coronavirus pandemic have juiced corporate profits. As of December 26th, the S&P 500 is up 27.7% and the Dow Jones is up 18.8%.
S&P 500 YTD Returns, source Yahoo! Finance
However, there have been a variety of challenges throughout the year, such as supply chain issues, rising inflation, and COVID-19 uncertainties that have driven market volatility. Today, we are going to look at the three biggest winners and losers of 2021.
Meme Stock Holders
The rise of retail investors has been a major trend of 2021, starting in January, through the means of online forums such as r/WallStreetBets on Reddit. Small investors were able to come together and pile in loads of money into struggling companies such as Gamestop ($GME) and AMC Entertainment ($AMC). Gamestop was able to rise nearly 1600% within the span of January alone, which has yielded an overall YTD return for investors of about 780%.
$GME returns in 2021, Y-Charts
According to Wells Fargo Securities, households across America have seen a jump overall in asset investing in stocks from 13% nearly a decade ago to 25%. Increased market participation is a healthy sign for the American economy, indicating the aggregate increase in investments by citizens, which is a crucial sign following the variety of stimulus checks and inflationary signs of the past two years. Retail investors and "meme stock" holders have definitely, for the most part, had major success in 2021.
2. Mega Cap Tech Companies
2021 has been an incredible year for the overwhelming amount of investors, especially those who concentrated on the massive technology companies that have led the way for the bull run. Take a look at the YTD returns for these 5 companies: Nividia ($NVDA) is up 126%, Alphabet ($GOOGL), the parent company behind Google, is up 70%, Microsoft ($MSFT) is up 53%, Tesla ($TSLA) is up 46%, and Apple ($AAPL) is up nearly 37%. Even after the drama and controversy surrounding Mark Zuckerberg and Facebook, the company is up 25% year to date. Global trends in the rise of demand and the creation of technology have allowed these large tech companies to take 2021 by storm.
3. Vaccine Companies
The takeover of COVID-19 on the economy and the lives of Americans set the stage for the massive role the vaccines would play in reopening society. Thus, biotechnology companies Moderna ($MRNA) and Pfizer ($PFE) stocks have surged following the development and deployment of their COVID-19 vaccines to millions of Americans. Moderna is up 123.7% year to date at $250 a share, while Pfizer is up 60% YTD, trading at $59 a share.
$MRNA 2021 Returns, tradingview.com
While Moderna stock has fallen off of its 2021 high around $475, the company still has had a tremendous 2021 and will continue to have an important role in society. With more variants developing and the virus not seeming to go away any time soon, these two companies will continue to have a strong outlook into 2022 through their creation of booster shots and other COVID-related products.
SPACs, also known as Special Purpose Acquisition Companies, are shell companies that are formed to strictly raise capital listed on the stock exchange, dodging the traditional IPO process. Although there have been a record amount of SPAC listings in recent memory, nearly 100 this year alone, and are considered an attractive opportunity by many investors, the group's median performance trailed the S&P by 15% YTD as of March 2021 according to Reuters. The Spac and New Issue ETF ($ETF) has only returned 9.59%, which compared to the S&P's return of nearly 28%, is vastly mediocre.
However, Some SPACs have seen massive success, such as Digital World Acquisition CORP. $DWAC is the SPAC for Trump's new social media ventures, which, despite much volatility, has returned a whopping 433% since its listing in September.
Peleton, the American exercise equipment, and media company, experienced massive returns throughout 2020, partially due to the rise of the pandemic. Since many people could not go to gyms because of the quarantine, customers instead turned to using Peleton equipment at-home capabilities to get their workouts in. In 2020, Peleton had nearly 400% returns, starting at around $30 a share in January 2020 and ending at $150.
However, 2021 has not treated the company the same, as Peleton has struggled to grow its revenue. As opposed to 2020, where Peleton spotted a revenue growth of 232%, 2021 has yielded that figure at 54%. The stock has plummeted 74% this year alone, down to shares pricing at $38.60.
Disney has had a rough year compared to its large corporation peers. $DIS stock is down 3.1% since the start of 2021. The pandemic has hit the company hard: case fluctuations have tempered demand for its theme parks as well as their availability. Concerns with the Delta and Omicron variants have and will continue to yield mixed and slightly negative results for Disney. Poor and mixed fiscal results through Q2 to Q4 have dropped the stock, as Disney attempts to get a share of the streaming industry with Disney+.
Disney+ only added 2 million subscribers in the most recent quarter, which is the lowest number of new users since the service launched. According to the LA Times, analysts blamed increased competition and lack of hype surrounding new content as catalysts for this poor growth. With new Marvel and Star Wars shows and movies set to launch in December and throughout 2022, Disney is poised to regain solid growth numbers following the diminishing of the omicron variant. 2021 most likely will be viewed as a short pitfall in their numerous decades of massive growth.