From a little-known manufacturing firm’s 13,000% rally in its US stock-market debut to a flash crash across Nordic stocks, there was no shortage of dramatic moments that consumed equity investors’ focus in 2022.
(Bloomberg) — From a little-known manufacturing firm’s 13,000% rally in its US stock-market debut to a flash crash across Nordic stocks, there was no shortage of dramatic moments that consumed equity investors’ focus in 2022.
It was a turbulent period for global stocks amid central banks’ efforts to tamp down rampant inflation, but much of the daily drama that livened up watercooler conversations had little to do with the macroeconomic tides.
The year brought historic single-day swings in market valuations of the biggest technology companies, abrupt shifts in momentum in Chinese stocks and a shocking plunge in a troubled Swiss bank. Retail behemoths crashed on back-to-back trading days, a Chinese electric-vehicle maker tumbled on speculation over a Warren Buffett-sized stake and tax-cut drama roiled UK markets.
In a trip down memory lane for stock-watchers, here are 10 standout episodes from this year’s abundance of eye-popping moves:
Feb. 3: Meta Wipeout
Facebook-parent company Meta Platforms Inc. reported catastrophic quarterly results that raised concern about user growth and featured a disappointing sales forecast. The stock tumbled 26%, erasing $251.3 billion of market capitalization, in the biggest one-day wipeout in market value ever for a U.S. company.
It was one of the clearest early indications that investors were souring on megacap tech stocks, a group that had led market gains for years. Meta’s struggles weren’t over: In October, another quarterly report triggered a selloff of about 25%, in part amid investor skepticism about the company’s expensive pivot toward the metaverse.
March 16: China Policy Rally
To shift from panic selling to a sizzling rally, sometimes all China traders need are a few words from the country’s policy makers. In March, official pledges to ease a regulatory crackdown, support property and technology companies and stimulate the economy spurred a jaw-dropping rally.
A gauge tracking shares of Chinese companies listed in Hong Kong surged the most since the global financial crisis while the Nasdaq Golden Dragon China Index jumped a record 33%.
The stunning turnaround, right on the heels of a rout spurred by concerns over Beijing’s close relationship with Russia and regulatory risks, highlights the extreme volatility that investors in Chinese equities endured this year as they struggled to navigate the impacts of strict Covid controls, regulatory crackdowns and slowing growth.
May 2: Nordic Flash Crash
Equity markets in the Nordic region and elsewhere in Europe were thrust into disarray early on a Monday morning, after an erroneous trade sent the large-cap OMX Stockholm 30 Index plunging as much as 8% in just five minutes. The crash was exacerbated because markets were less liquid than usual due to the UK market being closed. The abrupt move sent traders scrambling, as they were still on tenterhooks after Russia’s invasion of Ukraine.
It would take most of that day — and the next — for the dust to settle and to identify the trigger for the temporary wipeout that at one point reached 300 billion euros ($318 billion): an erroneous transaction on Citigroup Inc.’s London trading desk.
May 17-18: Retail Carnage
Barely two weeks later, retail bellwethers Walmart Inc. and Target Corp. came under fire on consecutive days. First, Walmart slashed its annual profit forecast on higher supply-chain costs and as consumers shifted spending to necessities amid soaring inflation, sending the stock down 11% for its worst one-day drop since 1987.
The next day, Target struck a similar tone by cutting its annual margin forecast, prompting a 25% stock slump that was also its worst drop in about 35 years. The S&P 500 sank, and a gauge of retailers plunged to the lowest level since June 2020.
July 12: Buffett and BYD
BYD Co.’s shares tumbled the most since 2020 after a mysterious 20.49% stake in the Chinese electric-vehicle bellwether appeared in Hong Kong’s clearing system.
Speculation swirled for weeks that this could lead to a stake sale by Warren Buffett’s Berkshire Hathaway Inc., as it equaled the company’s position in BYD, until it was confirmed. Berkshire has since sold more than 25% of its position, contributing to a roughly one-third decline in the stock since around mid-July, even as BYD has reported record monthly sales.
Aug. 31: 13,000% Pop
A China-based garment manufacturer made history with a scorching trading debut, part of a trading pattern in small listings that sparked scrutiny from the exchanges and a warning of potential fraud from regulators.
Addentax Group Corp. climbed more than 13,000% from its initial public offering price during its first session, following a US listing that raised $25 million through underwriter Network 1 Financial. It’s the biggest opening-day gain for any US IPO since at least 1990, according to data compiled by Bloomberg excluding deals worth $1 million or less.
The surge, which has since been completely erased, was part of an unusually frequent pattern of pops in New York’s small IPOs this year. For example, the eight underwritten by Network 1 this year soared by an average of 1,910% in their debut sessions, according to data compiled by Bloomberg. While scrutiny is increasing around the unusual trading, no specific firms have been accused of wrongdoing.
Sept. 26: UK Budget Fallout
UK traders were taken on a roller-coaster ride after new Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng unveiled a raft of tax cuts in their so-called mini budget. The Friday announcement roiled markets as investors fretted over the increased government borrowing that would be required to fund the policies. But for stocks, most of the damage came the following Monday, on Sept. 26, after Kwarteng doubled down on his unorthodox measures in weekend television interviews.
Shares most exposed to Britain’s economy slumped, with an index tracking homebuilder stocks dropping more than 6%. Banks, real estate funds and retailers were also hit. Kwarteng was fired on Oct. 14 and Truss quit less than a week later, for the shortest stint as UK leader on record.
Oct. 24: China Party Congress Rout
Chinese President Xi Jinping’s move to surround himself with loyalists at the Communist Party congress triggered the biggest plunge in Chinese equities since 2008. Foreign investors dumped a record amount of mainland shares via trading links in Hong Kong on worries that China’s Covid Zero policy would continue without opposition and amid skepticism about the support for private enterprise.
Oct. 27: Credit Suisse Plunge
Shares of Credit Suisse Group AG dropped 19% — the most on record for the bank — after the Swiss lender reported a roughly $4 billion loss and announced a much-anticipated strategic plan. The shares have continued to slump, setting a record low this month.
The bank has been in the spotlight after billions in losses over the past two years amid scandals involving Greensill Capital and Archegos Capital Management and top management changes.
Nov. 10: Historic Apple Gain
High inflation was a drag on tech stocks throughout 2022, setting the stage for a huge rally on signs of cooling price pressures. On Nov. 10, softer-than-expected inflation data was the catalyst for a broad-based advance, including at Apple Inc., which soared 8.9%.
That translated to a $190.9 billion increase in market value, the most ever by a US-listed company, narrowly beating out Amazon.com Inc., which added $190.8 billion after strong results in February.
–With assistance from Ryan Vlastelica, Joe Easton, Charlotte Yang, Jonas Ekblom, Janet Freund, Katrina Lewis, Macarena Muñoz and Drew Singer.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
