Recap 2022, Here's What Equity Needs To Understand Before Entering 2023
'Hopefully this challenging year will end and the new year's rays will last.'There are only a few days left before the challenging year 2022 draws its curtain.Various events happened this year so that some experts think 2022 will be the most difficult period since the financial crisis of 2008 with the Federal Reserve (Fed) actively implementing rate increases despite high inflation.Check out the summary of things to take note of in 2022, in preparation for 2023 below.The Fed, Inflation and Tightening PolicyAs of the last FOMC meeting, the Fed has raised interest rates by 50 basis points to bring the total amount of policy tightening to 4.50%.It was the highest total cost of borrowing since 2007, in line with market projections.Examining the record of the tightening policy, the Fed first raised rates by 25 basis points in March, followed by 50 basis points in May and 4 times in a row raising rates by 75 basis points.The Fed looks like it has no plans to stop, with a projected rate hike of 4.1% in 2023, 4.1% in 2024 and a 3.1% drop in 2025.FAANG stocks are losing their fangsTech stocks considered resilient are seen struggling to post gains in 2022.The average of Wall Street's main indexes such as Dow Jones Industrial, S&P 500 and Nasdaq Composite declined due to the pull of technology stocks.Among the biggest contributors to the fall is certainly Amazon, which became the first company to lose $1 trillion, in addition to Netflix, which is struggling with the number of users.Not to be left behind is Facebook, which had to bear the loss of its metaverse investment, causing the company's profits to drop, and Apple, which is facing supply chain problems due to the closure of China.Tesla Stock Crash Blames Elon MuskOf course, the main focus of the equity market this year is directed at Tesla and Elon Musk's Twitter.Musk's acquisition of Twitter through the sale of a stake in Tesla became the starting point for the electric car company's downfall.Musk's one-sided focus on Twitter also triggered the collapse of investor sentiment towards Tesla due to internal problems such as supply chain, model delivery and lack of global demand.And it cannot be denied that the fall in Tesla shares also brought Musk's position as the richest man in the world down to the 2nd place, for the first time since September 2021.
'Hopefully this challenging year will end and the new year's rays will last.'
There are only a few days left before the challenging year 2022 draws its curtain.
Various events happened this year so that some experts think 2022 will be the most difficult period since the financial crisis of 2008 with the Federal Reserve (Fed) actively implementing rate increases despite high inflation.
Check out the summary of things to take note of in 2022, in preparation for 2023 below.
The Fed, Inflation and Tightening Policy
As of the last FOMC meeting, the Fed has raised interest rates by 50 basis points to bring the total amount of policy tightening to 4.50%.
It was the highest total cost of borrowing since 2007, in line with market projections.
Examining the record of the tightening policy, the Fed first raised rates by 25 basis points in March, followed by 50 basis points in May and 4 times in a row raising rates by 75 basis points.
The Fed looks like it has no plans to stop, with a projected rate hike of 4.1% in 2023, 4.1% in 2024 and a 3.1% drop in 2025.
FAANG stocks are losing their fangs
Tech stocks considered resilient are seen struggling to post gains in 2022.
The average of Wall Street's main indexes such as Dow Jones Industrial, S&P 500 and Nasdaq Composite declined due to the pull of technology stocks.
Among the biggest contributors to the fall is certainly Amazon, which became the first company to lose $1 trillion, in addition to Netflix, which is struggling with the number of users.
Not to be left behind is Facebook, which had to bear the loss of its metaverse investment, causing the company's profits to drop, and Apple, which is facing supply chain problems due to the closure of China.
Tesla Stock Crash Blames Elon Musk
Of course, the main focus of the equity market this year is directed at Tesla and Elon Musk's Twitter.
Musk's acquisition of Twitter through the sale of a stake in Tesla became the starting point for the electric car company's downfall.
Musk's one-sided focus on Twitter also triggered the collapse of investor sentiment towards Tesla due to internal problems such as supply chain, model delivery and lack of global demand.
And it cannot be denied that the fall in Tesla shares also brought Musk's position as the richest man in the world down to the 2nd place, for the first time since September 2021.
