A look at the key trends for the year

IM

2020 was a catastrophic year for the global economy, the UK is still faced a double-dip recession during winter amidst more lockdown measures and slower recovery rates challenging the early months of 2021. Still we see the UK is facing more challenges towards reaching freedom and so jobs are still in recovery mode.

As the global economy went into turmoil, the stock market has also been 'chaotic' as well during the past year, with many of the 'top trending stocks' to invest in, in 2021, seem heavily reliable to the economic recovery prospects. Experts can only speculate that the best stocks to watch in 2021 are based on the same factor that dominated the markets in 2020.

A year and a half into the global pandemic:

The top trending stocks of 2020 were tied to companies that accelerated from tendencies as a result of global lockdowns but on the other hand, many of the 'top stocks' for 2021 were expected to benefit from a healing economy and a return back to 'less turbulent' times. If 2021 proves to show strong earnings growth, stocks may have the room to grow into elevated valuations. As we have seen during the vaccination rollout, local economies have started to realise that recovery is on the move, with most lockdowns slowly coming to an end. As we finally hope to see the end of the destruction that COVID-19 has brought along, some may believe that we will see historically low interest rates for the ongoing period ahead, giving the ideal scenario for equities to thrive under the assigning of president Biden.

So what trends do we see continuing into the rest of 2021?

Biotech stocks - In light of the COVID-19 pandemic, biotechnology companies such as Moderna and Pfizer saw huge increases in the year to date performance. Moderna has already seen a 599.12% increase and Pfizer a little behind at 11.04% (until Dec 2020). Although Pfizer's YTD growth is a little lower than Moderna's it's by no means a company lagging behind. It's the 49th largest company in the world with a market value worth of $210 billion and Moderna supports a $60 billion market cap. The Moderna group actually raised over $600 million is biotech's largest IPO back in 2018. As the quest for vaccines goes on, analysts can presume that these biotech companies will be on the road to develop even more therapies, vaccines and medicines which will only add more to their stock value, so in turn, biotech companies are still on the strong 'to look out' list for the rest of the year.

Cloud infrastructure - Public cloud services have been growing rapidly over the past year due to working habits changing. As more people work remotely, the demand for cloud services and online communication apps such as Zoom and Google Meet, are on the rise. Zoom proved to be one of the biggest booming communication stocks in 2020, increasing 728% from March - October 2020 due to this very reason. Zoom has an impressive market cap of over $113.55 billion which, if we continue to 'work from home' and change our online habits for good, Zoom could grow even further. In the wake of the pandemic, businesses have now realised just how important it is to have an online presence (marketing, online stores) as well as the cruciality behind data sharing and remote work. As we delve deeper into online services in the coming years, we can only predict that cloud services will continue to be popular for the latter part of 2021.

Technology stocks - Analysts expect the habits that developed during the pandemic, such as delivery services and online shopping to persist during the recovery. E-commerce companies such as Amazon, Alibaba, and information technology companies such as Microsoft, all support the changing behaviours. As consumer demand increases for online shopping and small businesses rely on e-commerce and tech companies, technology stocks will continue to be a rising trend for the foreseeable future.

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