Markets 2021: Stocks Soar, IPOs Explode, Crypto Unleashes Economic news


Investors cram into “memes stocks”

Small investors have crammed into stocks in 2021, sometimes grouping together on online forums like Reddit’s WallStreetBets to stoke a frenzy against some companies like GameStop. The financially troubled video game retailer jumped more than 1,600% in January. The mania resulted in heavy losses for some hedge funds, multiple trading stops and Congressional hearings asking who was injured. The rise of small investors is one reason stocks made up a quarter of household assets in the third quarter, down from just 13% a decade ago, according to Wells Fargo Securities.

Bond yields

Bond prices have fallen and, in turn, their yields have risen this year, but not as much as one would expect with the economy growing and inflation surging. Still, returns remain low compared to history. The 10-year Treasury yield, for example, is still lower than it was in the spring. This could be the result of expectations of lower inflation and slower growth in the economy. Low bond yields have been one of the main reasons stock prices have soared so high: With bonds paying so little, there is a widespread belief on Wall Street that there is no alternative to the purchase of shares.

Battery powers

Sales of electric vehicles have nearly doubled around the world as automakers launched new models. Many consumers bought electric vehicles to avoid burning oil, but others opted for quick acceleration and precise handling. Shares of Tesla, the world leader in electric vehicles, had risen more than 40% as of December 22. The old guard in the industry has stepped up its commitment to electric vehicles – for example, General Motors is planning a GMC Hummer EV. Although electric vehicles will only account for 5.8% of global new vehicle sales this year, that figure could increase by nearly 15% in 2025, according to research firm LMC Automotive.


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