Goodbye 2021, the year when the pandemic took a few more swings at us, crypto and meme stocks provided distracting side shows, climate change dominated, inflation gained the upper hand and US markets again ended the year at new highs.
Although the alarm over the health and economic danger posed by the Omicron variant appears to be diminishing, a shift that is helping fuel another market rally, it is still causing disruption. As the year drew to a close, the chancellor was forced to resume a degree of financial support for the hospitality and leisure sectors, left reeling once again in a crucial trading period.
Besides the ongoing pandemic, 2021 was marked by the dominance – again – of the tech giants. Their strong performance has reflected our huge dependence on and interest in their products and services. Between them, they accounted for a large chunk of growth in the US market (itself accounting for close to 60 per cent of global markets). This year Microsoft joined Apple in the $2tn market cap club and Tesla joined the $1m club. But worries about inflation and rising interest rates towards the end of the year caused US growth stars to have a wobble. There could be more of that to come, given their generally super-high valuations. Nevertheless, their gains over the past two years have reinforced the message that UK investors must look beyond their home market.