The first half of 2019 is officially in the books. So, what did we learn?
Well, the market is resilient, for one. The 14% decline in the last quarter of 2018 seems like eons ago now, as the S&P 500 breaches 3,000 for the first time.
That being said, let’s run it back. Here are the winners and losers from the first six months of 2019.
The Overall Market
As it turns out, the December sell-off ended up being a V-bottom. The S&P 500 has snapped back in 2019, rising about 17% in the first six months of 2019. It was the best first half for the index since 1997.
Leading the way was technology, which rose 27% through June, led by massive rallies in AMD and Facebook.
If there is one thing the first half of 2019 might be remembered for, it’s the spate of massive IPOs. IPOs raised just under $30 billion in the first half of 2019, up from $28.6 billion in the first six months of 2018, according to Renaissance Capital. The second quarter specifically was the most active quarter in four years in terms of number of deals.
Names like Uber, Lyft, Pinterest, and Zoom made waves, but the clearest winner of the bunch was Beyond Meat, which at one point was up 700% from its IPO price of $25.
In March the CBOE pulled the plug on its bitcoin futures product, providing another sign that the once high-flying cryptocurrency appeared to be dead.
Oh, how times have changed. Not a couple of weeks later, bitcoin began to rally. To date, the asset is up around 250%, and investors who were able to ride the CME’s bitcoin futures or the Grayscale Bitcoin Investment Trust have also enjoyed similar moves.
Though volatility remains the name of the game, as of this writing bitcoin remains at its highest level since January 2018.
What can we say about the Federal Reserve that hasn’t already been said incorrectly by the Federal Reserve?
All jokes aside, Jerome Powell has not won himself any new friends in 2019. Between the complete 180-degree shift from December’s hawkish tone and the frequent criticisms from President Trump, the one thing everyone on Wall Street appears completely unified on is anger directed at the Fed.
With a quarter-point rate cut likely looming at the FOMC’s July meeting, Powell and Co. still have a long way to go in convincing the masses that they have a handle on the economy.
2019 has been nothing short of an unmitigated disaster for Boeing. Stemming from the crash of a 737 MAX 8 operated by Ethiopian Airlines on March 10 that killed all 157 people on board, the world’s largest maker of planes has found itself under fire from every direction.
With the 737 MAX fleet still grounded, an ongoing investigation by the Department Of Justice, and the cancellation of several major orders, the company now finds itself on the precipice of being overtaken by rival Airbus as the top airplane manufacturer in the world for the first time in seven years.
Anger over the influence of big tech companies has been building for several years, but that sentiment has gained even more momentum in 2019.
The four largest tech companies—Amazon, Alphabet, Apple, and Facebook—are all under investigation by either the FTC or DOJ, and several presidential candidates have come out in favor of regulating the group more closely.
Though it will likely take years for this story to shake out, it is clear now that the question of regulating Big Tech not only isn’t going away but will hang over these companies and investors until a solution can be found.
The author is long Facebook and AMD in his 401(K)
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