Declines on Wall Street Led to Lower Equity Markets Trade

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The US Equity Markets traded modestly low, as noted at the close of the market before the holidays last 23 December, despite overall gains compared to the previous trading day.

Despite the reported gains for the day, the S&P 500 said down 1.2 per cent, Nasdaq Composite at negative 1.35 per cent and Dow Jones at negative 1.10 per cent. The previous day, S&P 500 fell 1.45 per cent, Nasdaq at 2.18 per cent, and Dow Jones at 1.05 per cent.

Investors were still concerned about the possibility of a global recession with the central banks’ continuously increasing rates. This contributed to losses in the market, with tech shares losing the most. Many experts feel these threats may impact the global economy in 2023 more than the rising inflation.

In an interview on Squawk Box, David Tepper, founder of Appaloosa Management, stated, “I’m leaning short on the equity markets. The upside/downside just doesn’t make sense when I have so many central banks telling me what they will do.”

The decline in the US Markets affected other global markets. Australia’s ASX 200 opened at negative 0.2 per cent, Japan’s Nikkei opened at negative 1.1 per cent, Korea’s Kospi at negative 1.3 per cent, China’s Shanghai Composite at negative 0.5 per cent, and Hong Kong’s Hang Sent at negative 1.5 per cent.

Rupert Watson, Head of Asset Allocation at Mercer, advises investors, “I wouldn’t recommend anybody to go short equity at this point. Hedge funds, long-short equities, long-short credit. I think the time to own and add those to your portfolio makes a lot of sense. Because over the last ten years, no shorts have worked. At this point, I believe you can add a lot of value by incorporating long-short strategies.”

Other experts claim that 2022 will be the worst year for the three market index companies. This year, it is expected to break the three-year win streak of the markets.

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