2021 - a year on global stock exchanges that we will remember

The year 2021 is slowly coming to an end, the second year of the pandemic, a year of high economic growth and unprecedented inflation. A year in which nearly all US stocks grew and the bitcoin price she changed like in a kaleidoscope.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

An intense year on the markets

The past year has brought us a global GDP growth of 6%. (in Poland it will amount to 5,3 percent according to OECD forecasts.), the profits of listed companies in the world increased by 50%, which was a reflection of the shortest and sharpest recession in history. Growth was fueled by still zero interest rates in the US and the euro area. In Poland, the reference rate increased from 0,1 percent. to 1,75%, which, however, did not prevent inflation from rising. In November it was 7,8%, but in December it will probably be even higher. Trillions of dollars in government spending and stimulus programs also helped grow. Finally, such an increase would not have happened without the nearly 9 billion doses of coronavirus vaccines delivered worldwide. In 2022, we can count on a repeat, albeit more modest, in terms of GDP growth and company profits. We forecast that low US bond yields (despite the prospect of interest rate hikes) and high corporate profitability will help maintain high equity valuations.

Ubiquitous boom

In 2021, we were dealing with a "rally of everything", that is, the prices of almost all assets rose. The prices of cryptocurrencies increased the most cumulative capitalization has reached $ 3 trillionwhich means a threefold increase in less than a year. The prices of raw materials and real estate were also rising, both in the US and on the Vistula River. It is also the result of the highest inflation in the world in 40 years. US stocks posted a third consecutive year with double-digit returns (and that is only the third time in history). Low yields on US bonds and an unexpected 22% increase in corporate profits allowed US companies to keep valuations at 30%. higher than the historical level (currently the average P / E ratio is 21).

Meme-stocks provided the excitement

What will we remember in particular? The first quarter is the rally on GameStop shares. During the year, our index containing the so-called "Meme stocks" increased by 220 percent. At the same time, the yield on US 10-year bonds almost doubled to 1,7%.

The second quarter saw bitcoin's price drop by 50%. up to 30 thousand dollars, as a result of the ban introduced in China. Then there was a rebound after the appearance of the first ETFs based on bitcoin. In China, the second largest market in the world, a regulatory policy introduced under the slogan "Common prosperity" led to a significant drop in share prices.

The first interest rate hike in Poland took place at the beginning of the fourth quarter (6.10). It was followed by two more, which increased the reference rate from 0,1 to 1,75 percent. The fact that the rate hike was awaited is evidenced by the fact that the Polish stock exchange reacted to it most positively of all stock exchanges in the countries where the first rate hike took place. Polish shares during the month (two weeks before and two weeks after the hike) increased by 5,2 percent. In the fourth quarter, the price of oil increased to $ 85 a barrel, and the price of natural gas increased eightfold. With accelerating decarbonization in the European Union and increase in the price of allowances to carbon dioxide emissions, it resulted in a significant increase in the prices of electricity and gas. Retail buyers will feel it the most only from the new year.