When Will The Bear Market of 2022 Finally End?
The question every investor wants to know. Let’s look at some analysts opinions on when will the bear market end.
When Will The Bear Market of 2022 End?
2022 has been one of the worst years in history for the Stock Market. The S&P 500 is down 17%; The Nasdaq is down 28.82%; The Dow Jones is down 7% as of Nov. 14, 2022.
Investors in most sectors have seen their portfolio’s been slashed in half. Big tech investors have had the worst of it with industry giants like Alphabet (-35%), Meta (-66%) and Tesla (-42%) all experiencing catastrophic losses. When will stocks stop the free fall they’re currently in?
November has experienced a slight bear market rally, but it looks like those gains, or in most cases recoveries, will be short lived. For context, no bear market ever ended until the Fed stopped raising rates, something they haven’t done yet this calendar year.
No bear-market in history ended when the Fed was still raising the Fed Funds Rate…
If history is any guide, this bear market will end after the Fed stops further rate hikes or it starts cutting.
— Puru Saxena (@saxena_puru) November 10, 2022
While it’s unlikely that the Fed will “pivot,” meaning stop raising rates, there has been hints of them slowing the process. This could mean 50 basis points instead of 75 basis points, but CPI reports will need to keep falling for them to do that.
Perma-Bull Cathie Wood, seems to think things are setting up quite nicely for a recovery by one of her latest tweets.
If inflation is unwinding, as we believe, then we could be heading back to the future, the Roaring Twenties, the last time several general purpose technologies evolved at the same time: telephone, electricity, and the internal combustion engine. The setup is remarkably similar!
— Cathie Wood (@CathieDWood) November 12, 2022
Though she’s received criticism this year with her Ark Invest funds experiencing significant decline, she’s also been one of the better investors from 2015-now.
So will Wood’s prediction come true? It could. If inflation continues to decline, we’ll be in a much better position at this time next year.
But as I keep saying, when we thought things couldn’t get any worse for us socially, economically and politically after 2020, we were wrong.
During WWI and the Spanish Flu, supply chain and other shocks pushed inflation to 20%+. At its worst in June 1920, inflation peaked at 24% but then dropped precipitously in one year to -15% in June 1921. We would not be surprised to see broad-based inflation turn negative in 2023
— Cathie Wood (@CathieDWood) November 12, 2022
Wood makes a compelling case. The similarities are there. Now it’s in ‘President’ Powell’s hands.
Until then, it’s best to make cautious trades and limit risk.
So, when will the bear market end?
So will Wood’s prediction come true? It could. If inflation continues to decline, we’ll be in a much better position at this time next year.