Stock market bloodbath: top 10 US stocks down 35% on average

• Top 10 traded US stocks from last year are all in the red so far in 2022
• Top 10 in UK have fared better, with four stocks positive thus far
• Stocks to buy have been oil and commodities due to fallout from Russian war

It’s been an ugly year so far for stocks, with the S&P 500 having its worst start to a year since 1939. The month just gone was particularly brutal, with the Nasdaq shedding 13.3% in April – its worst month since October 2008. 

BuyStocks.co.uk set out to assess quite how bad the damage has been for the most popular stocks from 2021, a year when the market seemingly did nothing but rise, and any decision to buy stocks was a good one. We also compared the damage on both sides of the Atlantic. For our popular stocks, we chose those with the highest trading volume from last year in the UK and USA. 

An increase in historical and implied volatility

The war in Ukraine, rampant inflation and a hawkish turn from the Fed have all contributed to fear and volatility in the market. The geopolitical climate is worsening by the day, and there is a fear that a recession is unavoidable. This has all manifested to create a risk-off environment, causing the red returns we discussed above. 

Top US stocks are all red in 2022

First assessing the US markets, looking at the most popular shares from one year ago, the results are…not good. 

It’s a clean sweep, with all stocks red and the average loss a staggering 35%. Although given the S&P 500 is off 17% and the Nasdaq down 28%, it should come as no surprise. 

Netflix and Shopify are the two worst performers, shedding about 70% of their value thus far this calendar year. Netflix’s earnings last month were catastrophic, losing subscribers and warning of less future growth. Shopify, for its part, has been similar. The prospect of decelerating retail sales was raised during earnings, and the pandemic online boom has very much subsided. 

The data does show that while Apple has dropped too, its performance relative to other blue-chip stocks has been stout, as the entire market has been rocked by the downturn. Any investor down only in the teens in percentage terms, while not exactly pleasing, should be relieved they have managed to weather the market better than most. 

Tech, of course, has been one of the worst sectors. And given the lean towards tech in the most popular stocks, the above chart reads particularly badly. Nvidia, AMD and Meta have seen about a third of their value evaporate. Even the stalwart that is Amazon has plummeted. 

The below graph shows how, for US stocks, this year started badly and simply got worse. It’s been quite a steady decline thus far in 2022.

UK top stocks faring better, with 4 of 10 up YTD

The top UK stocks, however, have fared a little better. In fact, somewhat surprisingly, four out of ten of the most popular stocks are up so far in 2022, which is notable given the FTSE 250 is off 19% so far in 2022. 

Russian war impacts

Right off the bat, however, we can see why. BP and Shell are oil companies, benefitting from the surge in prices as a result of the Russian war. Up 23% and 38% respectively, investors are comfortably in profit. Blowout earnings were reported last week by BP, too, with momentum continuing for the British company. 

Glencore is a commodity trading and mining company, and so the same thesis applies. The turbulent commodity markets and growing inflation concerns stemming from the Russian war, and wider macro climate, have seen the share price rise. 

So while the war has sent ripples through every market, sending investors fleeing for safe-haven assets such as cash and gold, there are, in fact, these isolated sectors where investors have benefitted from the fallout.

Remaining Stocks

That leaves us with Vodafone, the telecom company, up 9% so far this year. Activist investor Cevian Capital revealed a stake in the company in January, and a plan to shed poorly performing businesses and consolidate in key markets. While the yearly performance is boisterous, European telecom companies have struggled over the last number of years, given the intense competition and strict regulation. Vodafone had shed a third of its value in the years prior to 2022. 

This trend is the same with the aforementioned Glencore. The Anglo-Swiss company has been a terrible investment since it went public in 2011, and it was only last month that it finally put those early investors back in the black. 

The good news stops there, however. Banking stocks Lloyds and Barclays are down 11% and 22% respectively, while sports retailer JD Sports have been crushed, down 42%. Rolls-Royce isn’t much better, down 36% on the year. 

 

Conclusion

The markets have been brutal this year, and the above data for the most popular stocks back that up. As I’m writing this, the market is in the midst of the worst day since June 2020, and volatility is rising. 

While there have been isolated cases of performance – commodities, mining, oil – they are just that, isolated. The war triggered a lot of ill sentiment in the markets, perhaps the final straw in what had become an overheating market built on money printing. With inflation rampant, the Fed has been forced to turn hawkish, and this has triggered fear that the only way out of this is through a painful recession.

Outside the minority of stocks that have been placed in these commodity sectors, it has been a bloodbath for equity investors. The data does present the interesting result, however, that in terms of the most popular and biggest stocks, UK investors have fared better than their American counterparts, if only for the rather trivial reason that a bigger portion of those stocks reside in the commodity industry.