January: New Year – Old Problems
After decades of tension between the US and Iran, the year started at boiling point. Following a heated exchange of accusations from both sides, January’s events were probably the closest these two countries have come to going to war.
This uncertainty saw oil prices rise sharply initially, only to fall for the remainder of January as Saudi Arabia and other OPEC members rallied to offset the shortfall.
February: Patient 31
An unnamed virus began to circulate in China, but was largely contained within the country’s borders and didn’t appear to be an immediate cause for alarm. However, this all changed when South Korea’s 31st confirmed case was found to be responsible for the rapid spread of the virus, after coming into contact with more than 1,000 people in public spaces. This alerted the world to the potential threat posed to the population at large.
March: The Coronavirus Hits
March saw the stock market get hit hard by the uncertainty caused by Covid-19. The crash was so staggering that, within one week, the Dow Jones Industrial Average index faced not one, but three significant crashes. Tourism stocks were hit hard, but the consequences were so severe that we witnessed systemic effects and a spread across the majority of sectors.
April: Negative Oil
In a year full of ‘once in a lifetime’ events, April saw oil prices turn negative for the first time in history. As the world was put on hold, oil demand was rapidly surpassed by supply, which led the commodity futures to a historic mark of -$37 on 20 April, meaning that investors could actually get paid for taking delivery of a barrel of oil (and associated costs).
May and June: Stocks Recover
Contrary to general consensus, the North American stock markets appeared to display an unexpected ‘V-Shaped’ recovery. Driven by a historic stimulus package from the US Government and low global interest rates, investors turned to equities in search of yields that were simply not shown in other asset classes that could act as safe-havens in times of uncertainty.
July: Big Tech Leads the Way
Amid all the uncertainty caused by the pandemic, one thing became much clearer: technology will help us to keep moving forward. To understand the increasing impact of ‘Big Tech’ companies on the markets, the six biggest players currently are Apple, Microsoft, Amazon, Google, Tesla and Facebook. Between them making up 45% of the whole index.
August and September: The Bear Market Ends
If the Covid crash was unprecedented, the same cannot be said about the bear market that followed. Going back as early as the 1920s, average bear markets have endured for a median 300 days. However, this year the S&P 500 was able to resume its upward trend after a 33-day bear market, making it the shortest on record.
October: A Rising Star Called Zoom
With the world working from home, and families unable to meet in person, video chat apps quickly became one of the fastest rising ‘niches’ in 2020. The rise in users was so significant that by October, Zoom alone was worth more than Exxon Mobil, one of the world’s largest Oil giants. By October, Zoom shares had risen 658% Year-Over-Year, with Exxon losing around 55% in value.
November: US Elections
An unprecedented year couldn’t end without an unprecedented US Election. November saw the highest voter turnout in a US Election since 1900, with President elect Joe Biden receiving more than 80 million votes – a record-high in American history.
December: A New Hope
It’s hard to be optimistic after such a dismal year, but let’s conclude on a positive note. On 8 December, a UK citizen called Margaret Keenan became the first person in the world to receive the Pfizer, Covid-19 vaccine – kickstarting what we hope will be a concentrated, global effort to leave this pandemic behind us. It’s uplifting to begin 2021 knowing that science was able to produce a potential global solution in such an incredibly short time. There are still tough times ahead for sure, but it feels like we’ve turned a corner and the future’s looking brighter.