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.
Want extra insight into 2022?
Gain access to our 2022 Global Forecast series
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.
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.
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.
Banks, Retail Home Improvement, Building Materials, Healthcare Plans, Engineering & Construction
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.
Visualizing China’s $18 Trillion Economy in One Chart
China’s economy reached a GDP of 114 trillion yuan ($18 trillion) in 2021, well above government targets. What sectors drove that growth?
Visualizing China’s $18 Trillion Economy in 2021
China is the world’s second largest economy after the U.S., and it is expected to eventually climb into the number one position in the coming decades.
While China’s economy has had a much rockier start this year due to zero-tolerance COVID-19 lockdowns and supply chain issues, our visualization covers a full year of data for 2021—a year in which most economies recovered after the initial chaos of the pandemic.
In 2021, China’s Gross Domestic Product (GDP) reached ¥114 trillion ($18 trillion in USD), according to the National Bureau of Statistics. The country’s economy outperformed government targets of 6% growth, with the overall economy growing by 8.1%.
Let’s take a look at what powers China’s modern economy.
Breaking Down China’s Economy By Sector
|Sector||2021 Total GDP |
|2021 Total GDP |
|Wholesale and Retail Trades||¥10.5T||$1.7T||9.2%|
|Farming, Forestry, Animal Husbandry, and Fishery||¥8.7T||$1.4T||7.6%|
|Transport, Storage, and Post||¥4.7T||$0.7T||4.1%|
|Information Transmission, Software and IT Services||¥4.4T||$0.7T||3.9%|
|Renting & Leasing Activities and Business Services||¥3.5T||$0.6T||3.1%|
|Accommodation and Restaurants||¥1.8T||$0.3T||1.6%|
Industrial production—activity in the manufacturing, mining, and utilities sectors—is by far the leading driver of China’s economy. In 2021, the sector generated ¥37.3 trillion, or one-third of the country’s total economic activity.
Despite a slowdown in December, wholesale and retail trades also performed strongly in 2021. As the main gauge of consumption, it was affected by lockdown measures and the spread of the COVID-19 Omicron variant towards the end of the year, but still rose by double digits, reaching a total of ¥10.5 trillion*.
“Other services”, which includes everything from scientific research and development to education and social services, generated 16% of China’s total economy in 2021, or ¥18.1 trillion.
*Editor’s note: At time of publishing, China’s government seems to have since adjusted this number to ¥11.0 trillion, which is not consistent with the original data set provided, but worth noting.
Where is China’s GDP Headed?
China’s economy recovered noticeably faster than most major economies last year, and as the overall trend below shows, the country has grown consistently in the years prior.
Before the pandemic hit, China’s quarterly GDP growth had been quite stable at just above 5%.
After the initial onset of COVID-19, the country’s economy faltered, mirroring economies around the globe. But after a strong recovery into 2021, resurging cases caused a new series of crackdowns on the private sector, slowing down GDP growth considerably.
With the slowdown continuing into early 2022, China’s economic horizon still looks uncertain. The lockdown in Shanghai is expected to continue all the way to June 1st, and over recent months there have been hundreds of ships stuck outside of Shanghai’s port as a part of ongoing supply chain challenges.
China’s Zero-COVID Policy: Good or Bad for the Economy?
While every country reacted to the COVID-19 pandemic differently, China adopted a zero-COVID policy of strict lockdowns to control cases and outbreaks.
For most of 2021, the policy didn’t deter GDP growth. Despite some major cities fully or partially locked down to control regional outbreaks, the country’s economy still paced well ahead of many other major economies.
But the policy faced a challenge with the emergence of the Omicron variant. Despite lockdowns and an 88% vaccination rate nationally, seven out of China’s 31 provinces and all of the biggest cities have reported Omicron cases.
And China’s zero-COVID policy has not affected all sectors equally. Industrial production rose by more than 10% in the first 11 months of 2021, despite city lockdowns around the country. That’s because many factories in China are in suburban industrial parks outside the cities, and employees often live nearby.
But many sectors like hotels and restaurants have been more severely affected by city lockdowns. Many global economies are starting to transition to living with COVID, with China remaining as one of the last countries to follow a zero-COVID policy. Does that ensure the country’s economy will continue to slow in 2022, or will China manage to recover and maintain one of the world’s fastest growing economies?
Charted: U.S. Consumer Debt Approaches $16 Trillion
Robust growth in mortgages has pushed U.S. consumer debt to nearly $16 trillion. Click to gain further insight into the situation.
Charted: U.S. Consumer Debt Approaches $16 Trillion
According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.
This graphic provides context into the consumer debt situation using data from the end of 2021.
Housing Vs. Non-Housing Debt
The following table includes the data used in the above graphic. Housing debt covers mortgages, while non-housing debt covers auto loans, student loans, and credit card balances.
|Total Consumer Debt
Source: Federal Reserve
Trends in Housing Debt
Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.
Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.
Another key factor here is mortgage rates, which fell to all-time lows in 2020. When rates are low, consumers are able to borrow in larger quantities. This increases the demand for homes, which in turn inflates prices.
Ultimately, higher home prices translate to more mortgage debt being incurred by families.
No Need to Worry, Though
Economists believe that today’s housing debt isn’t a cause for concern. This is because the quality of borrowers is much stronger than it was between 2003 and 2007, in the years leading up to the financial crisis and subsequent housing crash.
In the chart below, subprime borrowers (those with a credit score of 620 and below) are represented by the red-shaded bars:
We can see that subprime borrowers represent very little (2%) of today’s total originations compared to the period between 2003 to 2007 (12%). This suggests that American homeowners are, on average, less likely to default on their mortgage.
Economists have also noted a decline in the household debt service ratio, which measures the percentage of disposable income that goes towards a mortgage. This is shown in the table below, along with the average 30-year fixed mortgage rate.
|Year||Mortgage Payments as a % of Disposable Income||Average 30-Year Fixed Mortgage Rate|
Source: Federal Reserve
While it’s true that Americans are less burdened by their mortgages, we must acknowledge the decrease in mortgage rates that took place over the same period.
With the Fed now increasing rates to calm inflation, Americans could see their mortgages begin to eat up a larger chunk of their paycheck. In fact, mortgage rates have already risen for seven consecutive weeks.
Trends in Non-Housing Consumer Debt
The key stories in non-housing consumer debt are student loans and auto loans.
The former category of debt has grown substantially over the past two decades, with growth tapering off during the pandemic. This can be attributed to COVID relief measures which have temporarily lowered the interest rate on direct federal student loans to 0%.
Additionally, these loans were placed into forbearance, meaning 37 million borrowers have not been required to make payments. As of April 2022, the value of these waived payments has reached $195 billion.
Over the course of the pandemic, very few direct federal borrowers have made voluntary payments to reduce their loan principal. When payments eventually resume, and the 0% interest rate is reverted, economists believe that delinquencies could rise significantly.
Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.
To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.
Misc6 days ago
The Top 10 Largest Nuclear Explosions, Visualized
Technology3 weeks ago
How Do Big Tech Giants Make Their Billions?
Markets4 weeks ago
Satellite Maps: Shanghai’s Supply Chain Standstill
Energy2 weeks ago
Mapped: Solar and Wind Power by Country
Datastream3 weeks ago
Visualizing Companies with the Most Patents Granted in 2021
Technology1 week ago
Synthetic Biology: The $3.6 Trillion Science Changing Life as We Know It
Markets3 weeks ago
Why Investors Tuned Out Netflix
Politics6 days ago
Mapped: The State of Global Democracy in 2022