By Jacob Howard
*Year to Date Data for 2022 as of 4/15/2022
The last decade has seen the longest bull market in the history of the S&P 500, which began in March of 2009 and ended with the onset of COVID-19 in March of 2020. Despite an abrupt end to an eleven-year run, the S&P 500 still returned 16.26% in 2020, highlighting the ability of markets to quickly recover and remain resilient in the face of global downturns. Every year in the last decade had events that uniquely impacted markets, many of which are highlighted below.
2012 hosted two of the more memorable events of the decade. In May of 2012, Facebook held its initial public offering (IPO), which is the fourth largest IPO in US history. This set the tone for other young, high growth companies to go public during the decade. Additionally, news about the LIBOR scandals broke in 2012, showing how bankers at major financial institutions colluded to fix LIBOR rates. This scandal shook confidence in the financial system and led many markets to develop and adopt replacements for LIBOR.
2013 boasted one of the best years in stock market history with the S&P, DJIA, and NASDAQ all delivering returns over 25%. Twitter went public in 2013 and has recently been in the news due to Elon Musk’s attempt to purchase the entire company for $43 billion in cash. Regardless of the outcome of Musk’s bid, Twitter had a disappointing decade, as it is currently trading around its IPO price. 2013 also saw a merger that would create one of the giants in the airline industry with US Airways and American Airlines merging to become the largest US airline. This poses interesting questions about how the DOJ will act following news of competing offers by JetBlue and Frontier to acquire Spirit in recent weeks.
Alibaba dominated headlines in 2014, after going public with the largest IPO in US history. This cemented the trend of tech companies going public earlier than usual to secure funding. This trend has begun to dwindle in recent years with the financial difficulty of COVID-19 raising questions about many of these companies as a going concern. Additionally, Facebook acquired Whatsapp and Oculus in 2014, which have become two cornerstones of its business mix, especially as it turns its focus into the metaverse.
The biggest story in 2015 was, arguably, the FED’s decision to raise rates for the first time in seven years. Since the beginning of the financial crisis, the FED continuously cut rates until they reached near zero, which led to almost a decade of quantitative easing and low treasury yields.
2016 was a year filled with major headlines, led by the election of President Trump and the beginning of Brexit. The election of President Trump would lead to the US-China Trade War in 2018, which put major stress on US companies, especially manufacturers that relied on Chinese imports. The withdrawal of the United Kingdom from the European Union had many implications for global financial markets. Many of those questions are still unanswered, but this event had major implications for the future of the UK, EU, and global relations. 2017 saw Amazon expand beyond its core businesses into groceries, as it acquired struggling grocer Whole Foods.
2019 had some of the most anticipated IPOs in recent history with Uber, Lyft, and Slack all debuting; however, all three of the stocks declined below their IPO price over the year. Investors’ sour taste about cash-burning companies may have influenced the increased use of SPACs during 2020 and 2021, as well as why many companies delayed their IPOs.
2020 and 2021 can best be characterized as the years of COVID-19. Although the virus is still active throughout the world today, its emergence in 2020 shook global markets and the development of a vaccine in 2021 led to some stability as markets recovered. 2020 and 2021 saw unprecedented growth in the use of SPACs to take companies public. Both years saw SPACs represent over half of US IPOs. Despite the popularity of SPACs, companies like AirBnB, DoorDash, and Robinhood all went public through IPOs during this period.
2022 is not even halfway over but it has seen many events that have shaken global markets. Russia’s invasion of Ukraine destabilized energy markets, as many developed countries rely on Russian oil and natural gas. Inflation is a global problem with many central banks not sure whether to raise rates or not. Finally, the US yield curve inverted, which has historically been a sign of looming recessions. Many of these events will set the stage for the next decade in financial markets.