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Warren Buffett’s Favorite Stock Soars, Netflix Fumbles: These Are The Best And Worst Performing Stocks Of 2022

Topline

Amid the market’s worst first half of a year in over five decades, tech and cruise line stocks have been among the worst performers in the S&P 500, while energy, healthcare and consumer companies have all seen shares outperform despite rising recession fears.

Key Facts

The benchmark S&P 500 index is down more than 21% this year, officially falling into bear market territory earlier this month: Nearly 400 stocks in the index are negative so far in 2022, while roughly 150 stocks have fallen by more than 20%.

The worst-performing stock this year is streaming giant Netflix, which has plunged more than 70%, followed by e-commerce company Etsy (down 66%) and orthodontics company Align Technology (down 63%).

With the Federal Reserve scrambling to raise interest rates in a bid to combat high inflation, tech stocks have been particularly hard-hit in 2022: Digital payments giant PayPal is down more than 60%, Facebook parent Meta 51% and chipmaker Nvidia 48%.

Cruise lines have also been in turmoil amid weak demand and higher costs, with Carnival falling 56%, Royal Caribbean 53% and Norwegian Cruise Line 47%.

Other notable declines so far this year include legacy automakers such as Ford and General Motors, down 46% and 45%, respectively, while vaccine maker Moderna has seen shares plunge 44%.

Though the market selloff has spared few areas of the market, several stocks have still outperformed: Energy company Occidental Petroleum has jumped roughly 100%, while pharmaceutical giant Bristol-Myers Squibb is up 23% and brewer Molson Coors 18%.

Surprising Fact:

The vast majority of the S&P 500’s top-performing stocks so far this year are all energy companies, thanks to the surge in oil and gas prices this year. Oil prices have remained above $100 per barrel since peaking at a nearly 14-year high of $139 per barrel in March, shortly after Russia invaded Ukraine. As a result, by far and away the best-performing stock in the S&P 500 is Occidental Petroleum, a favorite of billionaire investor Warren Buffett, who has been adding shares in recent months. Other energy companies have also seen their share prices skyrocket, including the likes of Hess (up 44%), Valero Energy (42%), Exxon Mobil (over 40%) and Halliburton (37%).

Tangent:

The best-performing stocks outside of the energy sector were healthcare companies, with the likes of Vertex Pharmaceuticals and Bristol-Myers Squibb cracking the top 20 and rising by 27% and 23%, respectively. Some consumer staples also outperformed, including Campbell Soup and Kellogg, both up by around 11% so far this year, as well as Dollar Tree, which has risen nearly 10%. Other notable gainers include brewer Molson Coors (up 18%), video game maker Activision Blizzard (16%), healthcare provider Cigna (15%) and telecom giant T-Mobile (15%). Several aerospace and defense companies have also jumped in 2022, as the U.S. continues to ramp up military aid to Ukraine amid Russia’s ongoing invasion, with the likes of Northrop Grumman rising nearly 20% and Lockheed Martin by 17%.

What To Watch For

While stocks have struggled for direction since falling into a bear market on June 13, it’s not all doom and gloom on the horizon, according to experts. The stock market took just 161 calendar days to go from its peak in January to a 20% decline threshold—compared to an average of 245 days in past bear markets, according to Sam Stovall, chief investment strategist for CFRA Research. That’s “good news” for stocks, he says, adding, a “quick” descent into a bear market often tends to signal more “shallow” declines ahead rather than “mega-meltdowns” declines of 40% or more.

Further Reading

Stocks Are Crashing But History Shows This Bear Market Could Recover Faster Than Others (Forbes)

Carnival Shares Plunge Nearly 15% As Morgan Stanley Warns Of Potential Stock Wipeout (Forbes)

Dow Plunges Nearly 500 Points, Recession Fears Resume As Consumer Confidence Hits New Low (Forbes)

Powell Says Fed Will Continue Hiking Rates Until There Is ‘Compelling Evidence’ That Inflation Is Slowing (Forbes)

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