Investing.com Report
The last 10 years were very kind to long-term equity investors. The major U.S. indexes are closing out the decade setting record highs, but it was hardly a smooth ride, with everything from flash crashing to Fed bashing.
Here’s a look at the top ten stories of the decade that investors keyed in on (and several others of note).
2010 – The Flash Crash
In “The Terminator” Skynet became self-aware in 1997. In the stock market the rise of the machines was evident in 2010 with the flash crash. The U.S. stock markets saw a rapid, unprecedented decline in May that took the Dow down 998.5 points in minutes.
But just as investors were preparing for the worst, the market righted itself and closed down just 3%. The plunge was exacerbated by algorithmic and high-frequency trading as the machines reacted to initial declines and the selling snowballed. When the official regulatory report came out in September, the cause was determined to be a $4.1 billion sell order by a mutual fund.
Also of note this year, the European debt crisis that eventually hit Portugal, Ireland, Italy, Greece and Spain, the explosion of a BP (LON:BP) oil rig in the Gulf of Mexico, Tesla"s (NASDAQ:TSLA) IPO and the Federal Reserve announcing QE2.
2011 – Occupy Wall Street
Chants of “We Are the 99%!” reverberated around Wall Street in September as the anger over the impact of the financial crisis and widening income inequality turned into a movement. Occupy Wall Street protestors hunkered down in Zuccotti Park in lower Manhattan, staying for almost two months until they were forced out.
The protest was organized by anti-consumerist group Adbusters.
Also this year, the Fukushima nuclear disaster, the Arab Spring and the passing away of Apple (NASDAQ:AAPL) co-founder Steve Jobs.
2012 - Draghi Pledges ‘Whatever It Takes’
Euro zone countries were facing an avalanche of debt, but one man was ready to ride to the rescue, staving off what many saw as the imminent collapse of the single currency.
In a speech in London in July, ECB President Mario Draghi pledged to use any means necessary to save the euro.
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” he said. “And believe me, it will be enough.”
The EU is still pegged into negative interest rates now, but the euro is still a going concern.
Other big news this year were the Supreme Court upholding Obamacare, the Libor scandal and Facebook (NASDAQ:FB) going public.
2013 – Gold Crashes
After 12-straight years of gains, a selloff in gold that many had been predicting for a while finally materialized. Gold prices tumbled more than 25%, going from $1,660 to around $1,200.
The global economy was back on surer footing and there was speculation that central banks would start a tightening cycle, hurting the non-yielding yellow metal. Prices were also hit hard in a two-day period on worries that Cyprus would liquidate its gold holdings.
Also this year, Twitter (NYSE:TWTR) followed Facebook to the public markets, Edward Snowden released secret NSA documents and Bitcoin started to really gain traction.
2014 – Alibaba IPO
Chinese e-commerce giant Alibaba (NYSE:BABA) cemented its place in market history in September when it became the biggest initial public offering. Taking into account the overallotment, or green shoe option, the company raised $25 billion as it debuted on the New York Stock Exchange.
Shares priced at $68 per share and saw an opening day pop, closing close to $94. The company’s record IPO haul was finally overtaken this year as Saudi Aramco (SE:2222), the state oil company, went public.
Also this year, oil prices were hit as the fracking boom began, Russia invaded Ukraine, Bank of America (NYSE:BAC) paid nearly $17 billion to settle accusations of fraud leading up to the subprime collapse
2015 – China Stock Bubble Pops
The chart of the Shanghai Index for 2015 would make even the most seasoned rollercoaster rider a little queasy.
After a huge, fast run-up, equities in China nosedived just as fast. The reason was classically simple: valuations had just gotten way ahead of the businesses’ performance. The Chinese market, which is dominated by retail investors, had pushed up prices with borrowed money (with lots of encouragement from the state).
Devaluations in the renminbi didn’t help either and the government was forced into a series of extraordinary measures, including the possibility of imprisonment for short-selling.
All told, the Shanghai Composite tumbled from a little more than 4,600 in May to a little more than 3,000 in September.
Other news included the ECB beginning its bond-buying program, The Kraft Heinz (NASDAQ:KHC) merger and Switzerland abandoning its peg to the euro.
2016 – Trump Elected President
While the immediate stock market impact when Donald Trump unexpectedly beat out Hillary Clinton for the U.S. presidency was fairly muted, Trump’s influence on not just the big-picture investing landscape but the day-to-day swings of the market has been huge.
There have been expected, market-pleasing moves like deregulation. There were unexpected, but also market-friendly things like the constant public bashing of the Fed and demands for lower rates. And there’s been moves that the jury is still out on, like a trade war with China that nevertheless have dictated trading.
Among other events that year were Brexit, the release of the Panama Papers and AT&T's (NYSE:T) purchase of Time Warner.
2017 – Bitcoin’s Record High
Cryptocurrencies were already on the radar of the market before 2017, but the nosebleed-inducing rally of Bitcoin brought them into the everyday global consciousness as investing vehicles and not just the payment of choice for the dark web.
Bitcoin entered the year having never traded above $1,000. It lost no time in passing that milestone on its way to its record high near $20,000. That was a gain of more than 2,100%. It closed 2017 around $14,500.
Among other highlights were Trump’s tax cut, the Fed’s series of rate hikes and the appearance of the Fearless Girl statue facing the charging bull near Wall Street.
2018 – A Terrible Fourth Quarter
Few people saw the fourth-quarter 2018 stock-market slump coming. They won't forget it any time soon, with the Dow falling 11.8%, the S&P 500 dropping nearly 14% and the Nasdaq slumping 17.5%.
Including a horrifying 653-point drop in the Dow on Christmas Eve, it was the worst quarter since the 2008 crash.
The causes were multiple.
Oil prices fell more than a third, battering energy stocks.
Battered tech stocks, led by Apple's 30% decline after its market capitalization soared above $1 trillion in the summer. The problem was falling sales of its flagship iPhone.
Rising interest rates and the domestic economy that seemed to be softening.
International concerns, including the U.S.-China trade fight and the Brexit fights roiling the United Kingdom and Europe.
The market was overbought going into that fall.
With the Christmas Eve selloff, the market had fallen too far and too fast. That set up an astonishing rebound on Dec. 26, when the Dow soared 1,086 points.
In other events that year, cryptocurrencies crashed back down to earth, NAFTA was cancelled and the fiduciary rule for financial advisers ended.
2019 – Cannabis Stocks Hammered
The optimism that comes with incredible promise slammed into the wall of reality and regulations in the cannabis sector in 2019.
As the first G7 country to legalize the weed near the end of 2018, Canadian cannabis companies raced into 2019 embracing the bold new and burgeoning global market. But with that head start came the daunting task of ramping up production, setting up international partnerships and worldwide expansion strategies all the while attempting to navigate regulatory hurdles that were not fully defined. The results saw cannabis stocks rocket to new highs and then steadily decline, racking up gut-cringing declines that ranged from 40% to 80%.
In the U.S., the passage of the the federal Farm Bill in late December 2018 gave the cannabis markets its upbeat start to the year unbridling the optimism that national legalization of marijuana moved from “if” to merely a function of “when.” But as 2019 comes to a close, the timeline is still unclear. Individual states, however, continued to embrace the movement.
Also this year, Trump was impeached, the U.S. continued to see record-low jobless numbers, protests engulfed Hong Kong, Uber (NYSE:UBER) went public and WeWork failed to do so.
