Category: Finance | Title: Was 2018 the Best Year for Global Markets and Tech Growth | Tag: 2018 Market Review | Meta Description: Data-driven look at 2018 markets, tech, and finance to see if it was the best year...
Global Market Performance in 2018
The S&P 500 ended 2018 down about 6.2%, its worst year since 2008, while the Dow Jones Industrial Average fell roughly 5.6%, according to Yahoo Finance. The MSCI All Country World Index declined around 11%, reflecting losses across developed and emerging markets. Despite the downturn, long-term multi-year returns for equities remained positive for most major indices, with the S&P 500 still up significantly over the prior decade.
Fixed income also faced pressure, with the Bloomberg Barclays U.S. Aggregate Bond Index posting a negative return for the first time in over a decade. The Federal Reserve raised rates four times in 2018, bringing the federal funds rate to a range of 2.25% to 2.5%, as noted by the Federal Reserve. These rate hikes were a key driver of the broader market correction during the year.
Technology Sector Highlights and Company-Specific Results
Apple Inc. became the first U.S. public company to reach a $1 trillion market capitalization in August 2018, before retreating later in the year. Amazon.com Inc. continued its expansion, with annual revenue surpassing $230 billion, and its AWS cloud unit remained a primary profit driver. Tesla Inc. reported deliveries of roughly 245,000 vehicles in 2018, as disclosed in its third quarter 2018 earnings release, while working toward Model 3 production targets.
SpaceX launched 21 missions in 2018, a record for the company at the time, and secured a $290 million contract with the U.S. Air Force for national security launches. Alphabet Inc. reported total revenue of over $136 billion for the year, with Google Search and other services remaining the dominant revenue source. These milestones highlight a year of record scale for major tech firms, even as stock valuations corrected sharply.
Financial Regulation, IPOs, and Key Economic Indicators
The U.S. Securities and Exchange Commission (SEC) implemented the final rules for the Tax Cuts and Jobs Act of 2017, including changes to corporate tax rates that dropped the federal corporate rate to 21%. The Tax Cuts and Jobs Act also nearly doubled the standard deduction for individuals, aiming to simplify filing for millions of taxpayers. These changes were a major factor in corporate earnings growth and share buyback activity throughout 2018.
U.S. initial public offerings raised a total of approximately $131 billion in 2018, driven by large listings in the technology and consumer sectors, according to Renaissance Capital data. The unemployment rate fell to 3.7% in December 2018, the lowest level in nearly 50 years, while average hourly earnings grew 3.2% year-over-year. Global GDP growth, however, began to slow, with the International Monetary Fund revising its 2019 forecast downward multiple times by the end of the year.