“2022 is a timely reminder that volatility is a feature of financial markets, not a bug,” said Scott Clemons, BBH chief investment strategist. “We enjoyed upside volatility from 2020 to 2021, and 2022 reminds us that Sometimes it goes up and sometimes it goes down.”
But Thanksgiving is supposed to be a happy time, so how about we take a look at some of the highlights on the market this year?
There is a saying on Wall Street that there is always a bull market. The same is true this year. Oil stocks have been big winners this year as crude prices soared … boosting sales and profits.
What’s more, many big oil companies are further rewarding investors by increasing their dividends, as fund manager Janus Henderson noted in a recent report: “Surging energy prices have driven big increases in dividends… .as oil companies distributed record profits to shareholders,” the company wrote.
Janus Henderson said total energy stocks dividend payments rose 7% to nearly $416 billion in the third quarter… 90% of oil companies either raised their dividends or held steady, with some energy companies opting to pay one-time special dividends.
Of course, dividend-paying stocks aren’t the only way for investors to get more cash this year. The bond market has been a lucrative source of income as rising U.S. and global interest rates push up yields.
Buy bonds and short stocks?
“Investors may be getting caught up in the stock market euphoria, but now is the time to focus on the bond market,” Ally senior market strategist Brian Overby said in a note, noting that investment-grade corporate fixed income is yielding more than 5.5%. , not far from the highest level since 2009.
Overby added that short-dated U.S. Treasuries are good value, yielding more than 4%. There are also opportunities for investors looking for more risk…and potential reward.
“Volatile parts of the bond market, such as U.S. speculative-grade fixed income and emerging market bonds, are yielding in the high single digits,” Overby wrote.
Finally, investors who bet be opposed to The stock market can also thank for volatility this year. … what is there to be thankful for?
Short sellers, who borrow shares and sell them in hopes of buying them back at a lower price and profiting from the difference when they return the shares to their lenders, have a lot to be thankful for.
“Shorting crypto stocks has been a profitable trade in 2022, with short sellers up almost 90% this year,” said Ihor Dusaniwsky, managing director of predictive analytics at research firm S3 Partners.
Technological achievements on deck
It’s not just cryptocurrencies that have had a rough year. The tech sector as a whole is underperforming, and when several tech companies report earnings this holiday-shortened week, investors will be looking for any sign that 2023 will be better. (Wall Street is closed on Thursday for Thanksgiving and the trading day is shortened on Black Friday.)
So it will be interesting to see if Dell and HP benefit from the same back-to-work trends that hurt Zoom. Their current quarter is not expected to be strong, but their outlook could hold the key to the market’s next move.
Analysts forecast revenue and profits for both companies to decline from a year ago. Shares of Dell and HP are both down more than 20% this year.
Thursday: U.S. markets closed for Thanksgiving
Friday: U.S. stocks close at 1 p.m. ET on Black Friday; Japan CPI