2018 was the year of resilience. We as a world were tested from one of the largest fires in California to the political climate all around the world. There was a mass shooting in Florida and we saw a group of young adults show us what resilience looks like. Finally, the finance world was tested, the whole investment world, especially in the United States, was taken for a ride.
From FAANG (Facebook, Amazon, Apple, Netflix, Google) stocks taking a hit, to the trade wars, government shutdown, Weed stock this was a crazy year for finance. We took some time to sit down and reflect on 2018.
Welcome back The Bear: After almost a decade of a Bull Market, 2018 woke up the Bear up, the Dow Jones will finish the year at 6% loss. As the market makes this transition, fear has driven the average investor, remember to always be tactful and never act on fear. That is the Orca way.
You’re a mean one Mr. Facebook: Data is the name of the game for Facebook and in 2018 it was exposed what they collect and how Facebook was used to influence the US election. Facebook was called into question by the government and we saw a major sell-off of Facebook stock as FB tumbled 27% in 2018.
New Fed Who This: Janet Yellen was replaced by Jay Powell as the head of the Federal Reserve. This was Trump's nominee as he blames the Feds for slowing down the economy. #justsaying
Spotify unconventional IPO: Spotify became the first public offering to go public without any big banks underwriting them, instead they kept everything in-house and self-financed their IPO from their own employee’s. Bringing a new perspective on how to go IPO.
Markets 420 Craze: As Cannabis in more states become legal and Canada became the first country to legalize weed, the craze to be part of the action gained a lot of traction and in October of 2018 that craze blew up skyrocketing any and all stocks related with weed. Since then they have leveled out, but keep an eye out for more weed stocks to hit the market in 2019.
Rate Hikes: The Feds raised the rates throughout 2018 as it finished out the year at 2.5%, expect this to continue in 2019 as we could say the rate get as high at 3.5%. Don’t know what Fed Rate is click here.
Elon got High, Tesla got Low: Elon Musk had a very in the spotlight 2018, from wanting to take Tesla private at $420/share and being investigated by the SEC, to smoking weed publicly and sending the stock into a frenzy. All said and done Tesla released their affordable Model 3 and at times even beat the market estimates, finishing out a hectic year for the stock which is up almost 4% in 2018.
Robinhood 3% lie: Robinhood the infamous no-fee trading platform caused quite the stir as it announced briefly that it will be releasing 3% savings account, millennials jumped to the sign-ups but Robinhood has since retracted their bold statement.
One Trillion Dollars: Amazon and Apple both become the first United States company to reach the 1 Trillion dollar Market Cap number, both proving their technical dominance in the world. Look out for both companies to acquire more companies in 2019.
Trade Wars: The market reacted heavily to the trade wars that we were involved in with China. As both countries slapped tariffs on each other, tensions only rose as an agreement has still not been met, look for the effects of this to continue to hit the market in 2019.
December Markets: December the happiest time in the world was one of the most hectic times for the market as the markets swung from their biggest loss to their biggest gain days. Historically December has been a strong month for the market but this year Santa Rally’s fell short and we were left with nothing but a Bear underneath our Christmas Tree's this year.
2018 made us resilient, we rode the roller coaster of the year through the ups and downs and look forward to seeing what 2019 will bring. Regardless we look forward to swimming by your side in 2019.
Happy New Year