The U.S. Stock Market in 2021: Best and Worst Performing Sectors
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The U.S. Stock Market in 2021: Best and Worst Performing Sectors

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U.S. Stock Market in 2021: The Best and Worst Performing Sectors

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The Stock Market in 2021: Best and Worst Performing Sectors

It was another eventful year—and while it may not quite compare to the pandemonium experienced in 2020, it was still jam-packed with market moving events, such as:

  • The highly-anticipated rollout of COVID-19 vaccines
  • Supply chain disruptions and an ongoing semiconductor shortage
  • Record-setting stimulus spending and debt accumulation by governments around the world
  • The emergence of new variants of concern such as Delta and Omicron
  • Big political upsets and the Capitol riots
  • Rising evidence of (non-transitory) inflation

Let’s take a look at which sectors thrived during the twists and turns of 2021—and which couldn’t stomach the volatility.

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Winners and Losers of 2021, by Sector

Our visualization today uses an augmented screenshot of the FinViz treemap, showing the final numbers posted for major U.S.-listed companies, sorted by sector and industry.

Here are the big beneficiaries of last year, along with those that got left behind.

The Winners

1. Big Tech

Over recent years, it’s been no surprise to see Big Tech near the top of any list. In 2021, Alphabet continued its tear, soaring 65% to hit a $2 trillion market cap.

Microsoft finished up the year 51%, Apple up 34%, and even Meta Platforms (née Facebook) posted double-digit gains. Only Amazon had single-digit gains, up 2.4% in 2021.

2. Semiconductors

Who benefitted most from the ongoing semiconductor shortage? Those that design or manufacture them, of course.

Nvidia, for example, more than doubled its share price over the course of the year, with 125% growth. Other companies in the semiconductor equipment and materials space, such as ASML and Applied Materials, saw gains above 60%.

3. Oil and Gas Exploration & Production

2020 was touch-and-go for oil prices, with futures even sliding negative at one point. However, the most recent year was much kinder to those in the energy industry.

The WTI price started the year below $50 per barrel, but finished the year at $75 per barrel—a swing that makes a big difference in the economics of each barrel.

4. Real Estate Investment Trusts (REITs)

It was one of the biggest years in decades for REITs, which saw the FTSE Nareit All Equity REITs index have its best performance since 1976.

Those that know REITs are aware that returns vary by property sector, and this remains the case here. Specifically, it was industrial REITs—and especially self-storage REITs—that outperformed. Extra Space Storage, a REIT that invests in self-storage units, finished up the year 96% and is the perfect example of this.

5. Asset Management

With record-low interest rates and continued upheaval from COVID-19, it sets a perfect stage for opportunistic private equity firms.

The asset management industry as a whole did well in 2021, but specifically it was PE firms like Blackstone and KKR that took advantage, posting gains of 99% and 84% respectfully.

Honorable Mentions:
Banks, Retail Home Improvement, Building Materials, Healthcare Plans, Engineering & Construction

The Losers

1. Precious Metal Miners

Inflation took off in 2021, and a usual beneficiary of this is the precious metals sector.

However, in the last 12 months, this has not been the case. Both gold and silver finished with negative returns on the year, which hurt precious metal miners.

2. Chinese Ecommerce

Beijing has been cracking down on China’s domestic tech sector as of late, and this has had a knock-on effect on companies like Pinduoduo, Alibaba, Baidu, and JD.com, which saw a collective collapse in their share prices.

All were down double digits, but Pinduoduo—the largest agriculture-focused technology platform in China—saw the highest amount of drag, falling over 67% on the year.

3. Solar Companies

Solar installations in the U.S. are chugging along at a record pace, as expected.

However, both regulatory uncertainty and supply chain problems have hampered stock prices in the short term. That’s why companies like Sunrun, a residential solar panel company, saw a 51% dip in stock performance in 2021.

4. Internet Content and Information

Big tech continued its surge, but other tech-enabled content and information companies saw tougher years. One example of this is Zillow, which shuttered the doors on its home flipping operation after realizing losses of $500 million.

Zillow stock was down 54% on the year, and has laid off a quarter of its staff.

5. Big Credit

It was a mediocre year for the big credit card companies like Visa and Mastercard, which were both flat in terms of stock market performance. Meanwhile, PayPal fell 19%.

According to billionaire investor Chamath Palihapitiya, 2022 may not be any better. Days ago, he predicted that both Visa and Mastercard will be the biggest business failures in the coming year.

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Energy

The Periodic Table of Commodity Returns (2012-2021)

Energy fuels led the way as commodity prices surged in 2021, with only precious metals providing negative returns.

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commodity returns 2021 preview

The Periodic Table of Commodity Returns (2022 Edition)

For investors, 2021 was a year in which nearly every asset class finished in the green, with commodities providing some of the best returns.

The S&P Goldman Sachs Commodity Index (GSCI) was the third best-performing asset class in 2021, returning 37.1% and beating out real estate and all major equity indices.

This graphic from U.S. Global Investors tracks individual commodity returns over the past decade, ranking them based on their individual performance each year.

Commodity Prices Surge in 2021

After a strong performance from commodities (metals especially) in the year prior, 2021 was all about energy commodities.

The top three performers for 2021 were energy fuels, with coal providing the single best annual return of any commodity over the past 10 years at 160.6%. According to U.S. Global Investors, coal was also the least volatile commodity of 2021, meaning investors had a smooth ride as the fossil fuel surged in price.

Commodity2021 Returns
Coal160.61%
Crude Oil55.01%
Gas46.91%
Aluminum42.18%
Zinc31.53%
Nickel26.14%
Copper25.70%
Corn22.57%
Wheat20.34%
Lead18.32%
Gold-3.64%
Platinum-9.64%
Silver-11.72%
Palladium-22.21%

Source: U.S. Global Investors

The only commodities in the red this year were precious metals, which failed to stay positive despite rising inflation across goods and asset prices. Gold and silver had returns of -3.6% and -11.7% respectively, with platinum returning -9.6% and palladium, the worst performing commodity of 2021, at -22.2%.

Aside from the precious metals, every other commodity managed double-digit positive returns, with four commodities (crude oil, coal, aluminum, and wheat) having their best single-year performances of the past decade.

Energy Commodities Outperform as the World Reopens

The partial resumption of travel and the reopening of businesses in 2021 were both powerful catalysts that fueled the price rise of energy commodities.

After crude oil’s dip into negative prices in April 2020, black gold had a strong comeback in 2021 as it returned 55.01% while being the most volatile commodity of the year.

Natural gas prices also rose significantly (46.91%), with the UK and Europe’s natural gas prices rising even more as supply constraints came up against the winter demand surge.

Energy commodity returns 2021

Despite being the second worst performer of 2020 with the clean energy transition on the horizon, coal was 2021’s best commodity.

High electricity demand saw coal return in style, especially in China which accounts for one-third of global coal consumption.

Base Metals Beat out Precious Metals

2021 was a tale of two metals, as precious metals and base metals had opposing returns.

Copper, nickel, zinc, aluminum, and lead, all essential for the clean energy transition, kept up last year’s positive returns as the EV batteries and renewable energy technologies caught investors’ attention.

Demand for these energy metals looks set to continue in 2022, with Tesla having already signed a $1.5 billion deal for 75,000 tonnes of nickel with Talon Metals.

Metals price performance 2021

On the other end of the spectrum, precious metals simply sunk like a rock last year.

Investors turned to equities, real estate, and even cryptocurrencies to preserve and grow their investments, rather than the traditionally favorable gold (-3.64%) and silver (-11.72%). Platinum and palladium also lagged behind other commodities, only returning -9.64% and -22.21% respectively.

Grains Bring Steady Gains

In a year of over and underperformers, grains kept up their steady track record and notched their fifth year in a row of positive returns.

Both corn and wheat provided double-digit returns, with corn reaching eight-year highs and wheat reaching prices not seen in over nine years. Overall, these two grains followed 2021’s trend of increasing food prices, as the UN Food and Agriculture Organization’s food price index reached a 10-year high, rising by 17.8% over the course of the year.

Grains price performance 2021

As inflation across commodities, assets, and consumer goods surged in 2021, investors will now be keeping a sharp eye for a pullback in 2022. We’ll have to wait and see whether or not the Fed’s plans to increase rates and taper asset purchases will manage to provide price stability in commodities.

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Technology

Apple’s Colossal Market Cap as it Hits $3 Trillion

Apple’s market cap recently hit $3 trillion. To put that scale into context, this visualization compares Apple to European indexes.

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apple 3 trillion market cap

Apple’s Colossal Market Cap in Context

In January of 2019, Apple’s market capitalization stood at $700 billion.

While this was perceived as a colossal figure at the time, when we fast forward to today, that valuation seems a lot more modest. Since then, Apple has surged to touch a $3 trillion valuation on January 3rd, 2022.

To gauge just how monstrous of a figure this is, consider that Apple is no longer comparable to just companies, but to countries and even entire stock indexes. This animation from James Eagle ranks the growth in Apple’s market cap alongside top indexes from the UK, France, and Germany.

Let’s take a closer look.

Apple Takes On Europe

The three indexes Apple is compared to are heavyweights in their own right.

The FTSE 100 consists of giants like HSBC and vaccine producer AstraZeneca, while the CAC 40 Index is home to LVMH, which made Bernard Arnault the richest man in the world for a period of time last year.

Nonetheless, Apple’s market cap exceeds that of the 100 companies in the FTSE, as well as the 40 in each of the CAC and DAX indexes.

Stock/IndexMarket Cap ($T)Country of Origin
Apple$3.00T🇺🇸
FTSE 100$2.90T🇬🇧
CAC 40 Index$2.76T🇫🇷
DAX 40 (Dax 30) Index*$2.50T🇩🇪

*Germany’s flagship DAX Index expanded from 30 to 40 constituents in September 2021.

It’s important to note, that while Apple’s growth is stellar, European companies have simultaneously seen a decline in their share of the overall global stock market, which helps make these comparisons even more eye-catching.

For example, before 2005, publicly-traded European companies represented almost 30% of global stock market capitalization, but those figures have been cut in half to just 15% today.

Here are some other approaches to measure Apple’s dominance.

Apple’s Revenue Per Minute vs Other Tech Giants

Stepping away from market capitalization, another unique way to measure Apple’s success is in how much sales they generate on a per minute basis. In doing so, we see that they generate a massive $848,090 per minute.

Here’s how Apple revenue per minute compares to other Big Tech giants:

CompanyRevenue Per Minute
Amazon$955,517
Apple$848,090
Alphabet (Google)$433,014
Microsoft$327,823
Facebook$213,628
Tesla$81,766
Netflix$50,566

Furthermore, Apple’s profits aren’t too shabby either: their $20.5 billion in net income last quarter equates to $156,000 in profits per minute.

How Apple Compares To Countries

Lastly, we can compare Apple’s market cap to the GDP of countries.

Country (excluding Apple)Total Value ($T)
Apple$3.0T
Italy$2.0T
Brazil$1.8T
Canada$1.7T
Russia$1.7T
South Korea$1.6T
Australia$1.4T
Spain$1.4T
Mexico$1.3T
Indonesia$1.1T

What might be most impressive here is that Apple’s market cap eclipses the GDP of major developed economies, such as Canada and Australia. That means the company is more valuable than the entire economic production of these countries in a calendar year.

That’s some serious scale.

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