2021 has been an unprecedent year in the financial world. When the year began, it was hard to imagine the rise of so-called “meme stocks,” rampant inflation akin to the Jimmy Carter era, and a historic supply chain crisis. But 2021 has taught us that the COVID economic recovery is happening in fits and starts. With the spread of new variants and an uneven recovery, 2021 epitomized high drama and even higher stakes.
Here are the top 10 financial moments of 2021.
1.) Runaway Bull Market
The stock market has performed very strongly this year, with the DJIA up 17.43% or 5,268 points for the year, as of this writing. The S&P 500 is up at a whopping 25.63% for the year, or 948 points. Tech stocks like Microsoft (MSFT) and Apple (AAPL) are up 50.35% and 33.68% year-to-date (YTD) respectively, while other major stocks like Tesla are up 28.61% year-to-date.
Stocks started off the year strongly, with the first 50 trading days of the Biden Administration seeing the market outperform the first 50 trading days of the Trump, Obama and Bush presidencies. In the week ending on December 10th, the S&P 500 hit an all-time high, as this year’s trading nears a close.
The Washington Bureau Chief of Bankrate.com, Mark Hamrick, says that while the market is doing well, investors must acknowledge underlying uncertainty: “Many professional investors are looking for something akin to returns in the coming year consistent with historical performance, while acknowledging the risk of a correction (which can happen at any time). If the Federal Reserve does indeed raise interest rates, that may well create some challenges for valuations and added volatility. A well-diversified portfolio is almost always a good tool to manage in the face of uncertainty.”
2.) The COVID Vaccine Miracle
It was hard to imagine last December that one year later, more than 61% of Americans would be fully vaccinated, and over 72% of Americans have been given at least one dose of the COVID vaccine. But thanks to Operation Warp Speed and vaccine efforts, the majority of the population in the U.S. and other Western countries are vaccinated. Recently, both former President Trump and President Biden have encouraged more Americans to get vaccinated.
President Donald Trump, in his typical style, told Newsmax TV in March 2021 that his administration’s work on Operation Warp Speed was “going to save the world.” Speaking with Greg Kelly, Trump said, “We have four vaccines and probably another one coming out soon – all done during my administration – done by me, to a large extent, because I got the FDA [Food and Drug Administration] to do things that, frankly, they didn't know they were capable of doing.”
Similarly, Senator Tommy Tuberville (R, Ala.) told Greg Kelly in February, “It’s a miracle what we’ve done – being able to get the vaccine in eight or nine months…The people in charge of this have done outstanding [work]. Take the vaccine. We still have people that won’t take it for some reason.” Experts predict that it is these critical vaccinations that will eventually end the COVID-19 pandemic.
3.) Trillions in U.S. Government Spending
The U.S. government has spent a record amount of money this year, in congressional bills like the $1.9 trillion American Rescue Plan Act and $1 trillion bipartisan Infrastructure law. According to a notecard passed around Congress by Senator Joe Manchin, “Since March 2020, Congress has provided a record $5.4 trillion in response to the pandemic. In addition, Congress provided another $1.2 trillion in the bipartisan Infrastructure law. That’s $6.6 trillion Congress has already provided above and beyond annual appropriations over the past 20 months. As a reminder for context: Marshall Plan—$151 billion adjusted for inflation and World War II—$4.5 trillion adjusted for inflation.”
Many view the record amount of government spending as a major contributing factor to inflation. Representative James Comer (R, KY) told Newsmax recently: “When the government keeps printing money and devalues the money, it's going to create inflation, and inflation is the ultimate tax on the poor.”
4.) COVID Billionaires
The wealth of America’s 644 billionaires has compounded at astronomical levels since March 2020, at rates arguably unprecedented in history. COVID has created “The Greatest Transfer of Wealth in Human History,” per CNBC’s Jim Cramer. COVID vaccines alone have created nine new billionaires thanks to their profits from vaccine production, according to CNN.
In March 2020, Amazon founder Jeff Bezos and Microsoft co-founder Bill Gates had a net worth of $113 billion and $98 billion, respectively. As of October 2021, their net worth had ballooned to $192 billion and $132 billion. The numbers are even more dramatic for billionaires Elon Musk and Mark Zuckerberg.
Tesla CEO Musk’s net worth rocketed from $24.6 billion in March 2020, to an astonishing $209 billion in October 2021—a 751% increase in just 19 months. Facebook Founder Mark Zuckerberg’s wealth increased from $54.7 billion to $117.6 billion, an increase of nearly 115% in 19 months.
JD Vance, a Republican candidate for Senate in Ohio, told Newsmax: “COVID lockdowns have hit small businesses and workers the hardest—but they’ve been very good for industries like Big Tech and Wall Street.”
In other words, COVID-19 has done a good job of helping the rich get richer.
As Vance explains: “For example, Step 1…Jeff Bezos argues the need for lockdowns. Step 2 is small businesses shut down, driving people to Amazon, and Step 3 is Jeff Bezos [becoming yet] extraordinarily wealthier because people in lockdown use his products. A lot of these policies have [caused] normal people [to become] poorer. The problem with a lot of our elites is they either don’t care about the plight of the average American worker, or their response is to hand out an additional government check. Most people do not want to sit home collecting a stimulus check; they want a job, a good family, and a healthy community…. Our elites are not offering real solutions to solve the problem.”
5.) Visionary Elon Musk
Elon Musk was named TIME’s Person of The Year in 2021, and Musk continued to grab headlines throughout the year. From his tweets hyping Dogecoin, winning a massive SpaceX contract, to sparring with Elizabeth Warren on Twitter, Musk made his presence known on Wall Street, in Washington, D.C., in outer space and in the national psyche in multiple ways in 2021.
As noted previously, Musk saw his wealth increase, the most dramatically of all Americans, from $24.6 billion in March 2020, to $209 billion in October 2021, a staggering 751% increase in just over a year and a half.
Additionally, the South African-born billionaire’s plans for his infrastructure company, Boring, are one step closer to fruition, as the city of Fort Lauderdale, Florida, has agreed to build “an underground transit system offering rides in Teslas between downtown and the beach,” as Newsmax has reported.
Finally, the always-ambitious Musk announced plans for his “brain-interface technology” company, Neuralink, to implant microchips into humans with spinal cord injuries at some point next year, with Musk telling The Wall Street Journal earlier this month, “We hope to have this in our first humans — which will be people [who] have severe spinal cord injuries like tetraplegics, quadriplegics — next year, pending FDA approval. [Our] standards for implanting the device are substantially higher than what the FDA requires.”
6.) Cryptocurrency Madness
Cryptocurrency exploded in 2021, with all-time price for coins like Bitcoin and Ethereum helping the industry move into the mainstream. Meme coins like Dogecoin and Shiba Inu rapidly gained favor, and retailers like AT&T, Starbucks and PayPal, among many others, announced they will accept cryptocurrency as a form of payment. Additionally, President Nayeb Bukele of El Salvador heavily touted crypto, announcing that El Salvador will be the first ever country to use Bitcoin as legal tender.
Senator Elizabeth Warren (D, Mass.) has warned repeatedly of the risks posed by cryptocurrency, but CEO of the crypto startup cmorq, Hossein Azari, is nevertheless optimistic, telling Newsmax, “Crypto will be adopted by billions of people -- 6.4 billion out of 7.9 billion in world who have smartphones. More people will adopt crypto. It will take time, but it will happen one way or the other. We are confident this will happen in the next five to 10 years. We want to build a financial system that reacts to what billions of people want.”
Azari also said he is confident in the potential for crypto to include millions of people across the globe who currently do not have access to traditional banks.
Azari joins the company of many other analysts like the founder of deVere Group, Nigel Green, who are bullish on the future of crypto. It is likely that 2021 was just the beginning of cryptocurrency’s rise.
7.) Red-Hot Real Estate Market
The real estate market boomed in 2021 and still shows no signs of cooling off. According to the National Association of Realtors (NAR), single family existing-home prices in October alone rose at an average year-over-year rate of 18%, the fastest pace in five decades. The reasons given for the increase include: “strong job growth, historically low mortgage rates, and inadequate housing construction and pandemic-induced supply bottlenecks.” Much of the growth was due to the lockdowns of 2020, and the reopening in 2021.
Between July 2020 and June 2021, housing sold at the fastest rate since 1989, according to the NAR. In step with this, home prices increased as well, as the median sales price in 2021 was $305,000, up from $275,000 in 2020. This uptick represents the highest increase since NAR started tracking data in 2002. Mike Miedler of Realogy Holdings told The Wall Street Journal in mid-November, “There's so many folks out there who have been sidelined, there's definitely pent-up demand.”
Finally, rental growth also boomed in 2021, as in the third quarter, homebuilders began construction on 16,000 homes purposed to become rentals…the highest quarterly total of starts for built-to-rent homes going back to at least 1990, according to U.S. Census data.”
8.) Rising Energy Prices + Inflation
Rising energy prices for home heating and gas prices heavily affected American consumers in 2021. According to AAA, the national average for one gallon of gas hit $3.22, marking the highest increase since October 2014. Oil prices are predicted to continue rising into 2022, with Goldman Sachs’ Damien Courvalin, the investment bank’s head of energy research, projecting oil could hit $100 a barrel.
Energy prices are expected to rise well over 30% this winter, per the U.S. Energy Information Administration (EIA). U.S. Energy Secretary Jennifer Granholm discussed the higher home heating costs on CNN: “[Prices] will be more expensive this year than last year. We have the same problem in fuels that the supply chains have, which is that the oil and gas companies are not flipping the switch as quickly as the demand requires."
Even before this winter, the rising energy prices were evident. In September, CNN reported natural gas rose more than 180% over the past year, to the highest level since February 2014. The uptick in natural gas could very well affect millions of Americans, as “about half of the homes in the U.S. use natural gas for space heating and water heating,” per the EIA.
Inflation is seen as a key contributor to the rising energy prices, as inflation has risen annually by 6.8%—the highest number in nearly 40 years, according to The Hill. Washington Bureau Chief of Bankrate, Mark Hamrick, tells Newsmax Finance: “Inflation, clearly, is weighing on the minds of consumers while causing many lower-income households to cut back where they can, to afford elevated costs of food, transportation and shelter. History will dictate whether inflation persists and whether the Federal Reserve, along with elected officials, erred in their responses [to stem the economic fallout from the coronavirus pandemic]. But there’s no mistaking the fact that inflation is here, at a higher-than-expected level, and persisting longer than predicted.”
Additionally, Hamrick noted the supply chain disruptions both America and the world saw this year, saying, “The chief contributor to the increase in inflation has been a mismatch between supply and demand for goods, resulting in global supply chain disruptions.” Energy is an industry that has not been spared from the disruptions, Lewis Black, CEO of Almonty Industries told Forbes, with shipping costs causing a significant impact across the energy space for oil, liquified natural gas and coal.
9.) China’s Power Moves
China’s economy recovered quickly from the pandemic in 2021, but roadblocks, partly from its steel industry and property development company Evergrande, led to slower growth in Q3.
China has become increasingly aggressive with Taiwan, leading many experts and the government of Taiwan itself, to talk about the possibility of a Chinese invasion of the country. In 2021, China was at the center of many news stories, from launching a hypersonic missile around the world, continuing human rights abuses in Xinjiang, to making cryptocurrency illegal.
Gentry Sayad, an attorney and international law expert with extensive experience working in China, tells Newsmax, “China’s economy is not transparent. They are not very transparent as far as their GDP. They are struggling with general issues on inflation; they have big inflation issues that they do not report. Evergrande is an example of a real estate bubble in China. They have had it before, and they have it again currently. What we see generally with the [Chinese] economy is, at least in this past third quarter, it’s just not very good. A lot of the numbers are fictionalized. Their economy is in a bad state, and Evergrande is an example of the real estate bubble going on again.”
10.) Electric Vehicles
Electric vehicles (EVs) saw rising popularity and exposure in 2021, with new manufacturing plants for cars and batteries being announced in places like Greensboro, N.C., Austin, TX, Kentucky and Tennessee. More Americans than ever are interested in, and actually buying, EVs.
Tesla is no longer the only game in town, as Rivian, Nio, and Nikola are fast-growing electric vehicle companies. More-established companies like Ford and GM are producing electric vehicles as well.
According to a YouGov survey published in October, 23% of Americans would buy an Electric Vehicle, a number much higher than the current market share of electric vehicles, which are 3% of all new vehicles sold. The top reason why Americans would buy electric vehicles, per the survey, is “to protect the environment.”
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