these keywords that sum up the exceptional year of the financial markets


The stock market was undeniably popular in 2021. The performances of the main stock market indices are definitive (as of December 28): + 29% for the CAC 40, + 22.5% for the Stoxx Europe 600, + 27.5% for the S&P 500 and + 22.5% for the Nasdaq. With a pace that has accelerated considerably in the last quarter. However, the champagne will not flow freely to celebrate the event.

Firstly, because very few investors had foreseen such a thing rally on stocks, while the health risks were far from dissipated. Still heavily invested in cash, equity funds have steadily chased up ratios, awaiting minimal consolidation (no less than six this year depending on the variant) to take the risk at a better price. The flow of buyers was therefore never really lacking.

Then, because the trend of the indices is above all a trompe-l’oeil, which hides a lot of bad performances, especially in Tech or in the industry. Therefore, 70% of the Nasdaq’s performance is based on four stocks (and five lines): Microsoft, Apple, Nvidia and Facebook / Alphabet. “This phenomenon of concentration is repeated from cycle to cycle but had never reached this level”observes Christophe Donay, Pictet Wealth Management’s head of economic research and asset allocation.

For some Wall Street projects, like Cathie Wood and her Ark Innovation stellar fund, 2021 has even turned into a nightmare. Likewise, the CAC 40 owes much to the leading trio of luxury stocks, LMVH, Hermès and L’Oréal, and to the rebound in banking stocks after several years of purgatory.

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All in all, the shares may seem expensive but remain valued at multiples lower than the historical peak of the 2000s, which is 21 times the 2021 results of the S&P 500 at the end of November and 15.8 times the 2021 results of the Stoxx 600. for risk, it remains within its historical average. So no euphoria on the markets.


While equity markets ultimately remained reasonable, given the magnitude of the economic recovery and the sharp rise in corporate results, much more exuberant new phenomena appeared on the markets. The rapid wealth amassed by some “peer” stock enthusiasts, these discounted stocks that social networks, cryptocurrencies or some fintechs are infatuated with, has something to think about for the biggest names on Wall Street.

Everyone remembers the GameStop saga, which triggered a strange collective movement, between speculation and rebellion, and which brought down some large funds specialized in short selling. Much has also been written about the insane rise of cryptocurrencies, including more grotesque ones like Dogcoin. The cryptocurrency market is now valued at around $ 2.5 trillion (of which 40% for bitcoin and 20% for ether) and some cryptocurrencies, such as Solana, have established themselves this year as worthy heirs to bitcoin in wallets. . .

Because the turning point has now begun: 2021 will have clearly marked a change in the status of cryptocurrencies, from a simple curiosity for geeks to a more respectable asset, eligible for wallets. Cryptocurrencies even have their own ETFs (index funds), a symbol of the integration of these virtual currencies into institutional finance. The other side of the coin: “cryptocurrencies” are increasingly sensitive to traditional market mechanisms, such as futures contracts, which have become the preferred vehicles for institutions to invest in these alternative assets (funds generally do not have the right to invest directly in a crypto).

However, the party may be over. A violent correction of “meme” actions is underway. GameStop has thus lost 26% in one month to 148 dollars, which still brings its earnings from the beginning of the year to … almost 700%! Investors still need not have bought the value at the high of January 27 ($ 482!).

Symbol of this speculative madness at the beginning of the year, Robinhood, the free trading platform, without which nothing would have been possible, also pays the price, losing almost half of its value since its IPO last July.

Coincidentally, the year-end correction also affects cryptocurrencies. Bitcoin lost 18% of its value in one month to $ 47,600 (but still gained 60% since the beginning of the year). A correction that could be explained by the liquidation of futures contracts at the end of the year.

Another symbol of this above-ground finance, even cryptocurrency exchange Coinbase can barely stay above its benchmark price ($ 250 per share) on the eve of its April IPO. For many observers, 2022 will be a test case for the cryptocurrency market, as many are betting on the bubble bursting in the coming months.

In the meantime, the regulators intend to bring order to this new finance and keep an eye on the “new influencers” of social networks, the tycoon Elon Musk in the lead, who dream of making it rain and shine on the markets. . Because, one of the lessons of this year 2021, will also have been the great return of individuals on the stock exchange, and above all of stockbrokers, galvanized on social networks.


SPACs (Special Purpose Acquisition Companies) are also the embodiment of this new uninhibited finance. They took off in the US in 2020 before experiencing an IPO frenzy in the first quarter, then some respite much to the relief of US regulators. Europe followed but not very measured and very framed. As of 30 September, 470 SPACs had been launched (of which 447 in the United States, two thirds in the first quarter) for 114 billion dollars raised (compared to 70 billion in 2020).

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For the record, a SPAC is a publicly traded vehicle whose sole purpose is to complete, within 18-24 months, the acquisition of an unlisted company before merging with it so that it is the goal that remains publicly traded (transaction unpacking). SPAC must therefore raise funds even before carrying out its project, on the sole “beautiful beauty” of its “sponsors”, generally entrepreneurs, investment bankers, but sometimes even celebrities from the show business.

For proponents, it’s a quick and efficient way to go public for a growing company, without waiting for a long enough earnings track record to consider a traditional IPO. SPAC investors therefore bet on the inspiration of the sponsors to find the best offers at the best price.

For the (many) detractors, the SPAC allows in the worst case scenario to enrich one’s sponsors, in the best case scenario to obtain a more than mediocre stock market performance (after the acquisition). The Wall Street policeman, however, whistled the stops, recalling that SPACs must be subject to the same transparency rules as listed companies, in particular as regards the forecasts of the unlisted target. Everyone now expects some market normalization.


Long rates remain stubbornly low. The market continues to blame the pessimists who are counting on a rate hike against the backdrop of the return of inflation and the final hype, given in September and confirmed in December, of the Fed’s ultra-accommodative monetary policy. While markets now expect three hikes. of short-term rates in the United States in 2022 (i.e. 0.9% at the end of next year), the 10-year US Treasury bond is plunging below 1.5%.

No longer rate hikes in Europe, certainly still out of step with the United States. The 10-year German Bund remains desperately in negative territory. Hence a flattening of the yield curve which, in theory, reflects an imminent very marked slowdown in the economy, which nobody believes. Investors have therefore been wondering for weeks about the refusal to raise long-term rates.

This is the famous “conundrum” or “conumdrum” observed in the 2000s by Alan Greenspan, then chairman of the Fed. How can long rates stay so low when the Fed gave the signal to hike short rates? Of course, there are many paradigms that no longer work, such as the Philips curve (the negative correlation between unemployment and inflation may be waking up), or the positive correlation between oil prices and long-term rates.

However, this conundrum worries managers, who are constantly hedging against rate hikes before hastily melting them. It must be said that the messages of the various central banks are now divergent. The Bank of Japan, the Swiss National Bank and the European Central Bank opt for a status quo on rates. Conversely, the Fed and the Bank of England are engaged in an upward move. As for China, it needs to revive its economy and could lower its rates. One thing is certain: all central banks will have to pilot a landing for the economy in 2022, being careful not to go astray.


Today more than yesterday we have to save the planet. And to save the planet, you need to invest in Socially Responsible Investment (SRI) funds. This is now the creed of the asset management industry, “We put ESG at the center of our management processes”, which thus responds to an undeniable social demand but which also sees in it a lifeline for active management, increasingly undermined by the explosion of low-cost index management. Especially since in 2021, active management will have had a hard time beating the indices.

SRI or sustainable finance, impact finance, thematic finance, in short, all these investment approaches that integrate extra-financial criteria, are nothing new. The institutional framework dates back to 2006 (United Nations principles), the impetus from 2015 with the Paris Agreements and its dissemination in France to the general public of the 2019 Pact Law which opens the doors to life insurance for SRI funds. . Then, the health crisis seems to have awakened consciences.

Everyone now seems convinced of the relevance of the approach and no one would risk missing the passing train anyway. Even the American giants, such as BlackRock, so far little interested, have succumbed to the green wave. And index management is now trying to catch up by multiplying ESG ETFs.

But the challenge now for finance is to live up to expectations and above all not to disappoint. The cause of “greenwashing” is never far off and NGOs and regulators are on the lookout. In August, German manager DWS was therefore accused of overestimating its assets under ESG criteria. The impact on the company’s image was disastrous. The limits of the various “SRI” labels are starting to appear and the whole challenge is to explain why carbon-intensive stocks, such as TotalEnergies, remain in the portfolio. After the principles, the time has come to put your nose in the engine and see precisely how it turns.