We probably don’t have to tell you that 2022 wasn’t an easy time for investors. The markets have undergone a significant decline, which has affected investors worldwide. The Russian invasion of Ukraine, the strength of the US dollar, inflation and interest rates all took their toll on the financial world this year.
The Russia-Ukraine war
Energy prices in Europe and around the world have significantly increased as a result of Russia’s war against Ukraine. Gas prices have also increased, raising fears about the stability of the EU’s energy supply.
A strong US dollar
The US dollar has been trading at its highest level in decades in comparison to currencies such as the euro and the pound sterling. A strong dollar can affect the markets in more than one way, for example, companies in the S&P 500 Index derive around 45% of their income outside of the country,1 so a strong dollar could hurt their profits.
Inflation, interest rate, and the Fed
The US Federal Reserve raised interest rates seven times in 2022, in response to higher-than-expected inflation. Rates have been declining after peaking at 9.1% in June, and investors everywhere will be keeping their eyes open in 2023 for those inflation and interest rate numbers.
Investing can be a long-term strategy to beat inflation. For instance, the S&P 500 Index has an average annual return of nearly 10%, which is higher than the 7.9% annual inflation rate recorded in February.
5 assets to watch in 2023
After such a year, investors are calculating their next steps. No one can tell what the future will bring, but we will be keeping our eyes open for these assets.
Disney
Disney’s theme parks and movie business may have suffered during the pandemic, but it did boost its streaming service, Disney+. Hitting 150 million subscribers in 2022,2 the company exceeded its five-year goal of 60–90 million3 subscribers.
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Natural Gas
Natural gas is a vital source of energy for the world, and 2022 made it very clear for people all over Europe, as a result of Russia’s war in Ukraine. Gas supplies from Russia to the EU will remain cut off, which will have long-term effects on the European market.
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ServiceNow
The ServiceNow flagship product is its cloud-based Now Platform, which links a company’s personnel, infrastructure, and operational procedures on a single hub. In the third quarter of 2022, ServiceNow announced subscription revenues of $1.74 billion, which represents 22% year‑over‑year growth.4
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SPX500 Index
This index, which includes the top 500 publicly traded US companies from over 100 industries, is regarded as a leading indicator of the state of the US economy and a daily performance benchmark for US stocks. Due to the fact that this index is based on market capitalisation, bigger companies have a greater impact than smaller ones.
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Chord Energy
On July 1, 2022, Whiting Petroleum and Oasis Petroleum merged to form Chord, an independent oil and gas producer with a dominant position in the Williston Basin. Chord’s total revenues for Q3 were $1.19 billion, up from $402.04 million the previous year.
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This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. Past performance is not an indication of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
- https://www.cnbc.com/2022/09/13/4-big-factors-impacting-markets-and-the-economy-right-now.html
- https://techcrunch.com/2022/08/10/disney-soars-to-152-1-million-subscribers-after-adding-14-4-million-in-q3/
- https://www.cnbc.com/2020/12/11/after-showing-massive-growth-disney-hikes-5-year-subscriber-goal-.html
- https://www.servicenow.com/company/media/press-room/servicenow-third-quarter-2022-financial-results.html
- https://www.nasdaq.com/articles/chord-energy-corporation-chrd-q3-earnings-lag-estimates