CE 100 Index Falls 35% As Tech Stocks Conclude a Horrific 2022
The fact that 2022 has finally come to an end is wonderful news for the linked economy and tech companies.
Although it only managed to recover 0.5% over the last five trading days, the CE 100 Index nonetheless ended the year 35.7% down. The poor performance was the worst overall market performance since the 2008 financial crisis, surpassing even the 33.5% loss witnessed in the tech-heavy NASDAQ Index.
All of the PYMNTS-tracked pillars had negative returns for the year, and a few particular pillars and stock performances sum up 2022 in a nutshell.
Drilling down into the pillar-by-pillar performances, three sectors highlight the 52-week period of ostensibly constant economic stresses. The largest laggard for the year was the communication sector, which had a loss of 51.1%. As of 2022, the Eat pillar has a 41% loss. The vertical for “Shop” decreased by 40.5%.
Although the equities themselves are erratic, and trading has been difficult, the trend toward more connection is unstoppable, as we remark. We can see that there was a 4% growth in the use of digital wallets across 11 major economies in Q3 and a 7% overall gain in digital transformation in the U.S., as revealed only last month by PYMNTS in the study “How The World Does Digital: Different Paths To Digital Transformation.”
The Great Reopening And Inflation Are Challenges
Though nothing moves forward in a straight path. When it comes to the pressures that ultimately affected CE 100 stocks, Wall Street was concerned about spending, profits, and sluggish top-line growth, as well as how the Great Reopening might affect it all. This past year, inflation was out of control, and rate hikes put pressure on both businesses and consumers. Through the final week of the year, the communications sector saw a little reprieve, rising 2.3%. As companies noticed a decline in the expenditure of their own corporate clients, names in the communications industry were frequently devastated.
Snap led the group to a gain during the last three trading days with a 4.2% gain. By the end of the year, however, the stock had fallen by 81.4% due to worries raised by the fact that management had mentioned in previous earnings calls that advertising partners in several of the company’s important verticals were cutting back on their own advertising and marketing expenditures. Due to a downturn in the company’s online operations, Zoom gained 2.8% but lost 64.4%.
Consumer Spending Concerns
DoorDash lost 3.6% for the week and finished 2022 with a 67.9% loss inside the Eat category. The firm saw triple-digit sales percentage growth rates during the pandemic in 2020, which fell to 69% in 2021 and are currently at approximately half that pace. Meanwhile, the aggregator industry has been actively innovating through subscriptions and new grocery alliances, as PYMNTS has observed. However, there are still general pressures because DoorDash said late last year that it will fire 1,250 employees, or around 14% of its global workforce. In contrast to PYMNTS’ other findings indicating there was a 4.5% sequential decrease in grocery subscriber engagement in the third quarter of 2022 compared to the second quarter, the attempt to widen reach beyond aggregators increases, at least somewhat.
It’s hardly surprising that people are reevaluating what is necessary and affordable even as they resume in-store purchases. As its growth stalled and it announced layoffs, Shopify’s stock fell by 75%. The emphasis today is on profitability as disruptor models experience slowdowns and outright top-line decreases. As 2022 came to a close, Vroom’s value was 90% lower. In the most recent quarter, the used car eCommerce company had a 28% reduction in revenue and a 30% decline in eCommerce unit sales. Vroom ascribed these declines to their recent shift in emphasis toward operational enhancement over sales volume.
Every new year marks a fresh beginning, and for the CE 100 Index, 2022 may best be summed up in in two words: good riddance.
