Stock Market Expected to Continue Falling, Experts Say Don’t Count on Santa Rally

Must Read

The ASX 200 recently dropped, following the decline seen in Wall Street. Many of the big names on Wall Street say that the economy is bound to recession. And as the US expects the worst, many experts foresee that other economies will follow suit.

Today’s stock market is showing signs of moving in preparation for the economic slowdown, and the move is predicted to impact corporate earnings. The central banks are expected to slow down interest rate hikes by the end of the year.

This is not good news for investors. Investors look forward to the ‘Santa Rally’, like children waiting to open their Christmas gifts. According to Nasdaq contributor Martin Tillier, those in the stock market industry are aware of the tendency of stocks to perform well from year’s end to the beginning of the new year.

According to Tillier, “Nobody is sure why this happens, but it has been a relatively reliable phenomenon for long enough to be real.” However, according to the journalist, “This year, Santa’s magic will have to be very strong to overcome what hit the wire this morning.”

José Torres, a senior economist at Interactive Brokers, noted that “the Santa Claus rally is cancelled this year as the equity market navigates higher yields and contracting earnings. Seasonal tailwinds that have traditionally driven Santa Claus rallies pale compared to the plethora of headwinds the equity market currently faces.”

The US stock indices dropped significantly in the previous week, and Australia followed suit. Richard Coppleson from Bell Potter noted that the worst is not over. The bear market is still looming. Coppleson warns that investors are to expect market pains at the start of the year into the first quarter of 2023.

He adds, “The past patterns suggest we’re coming close to the end of the current rate rise cycle and the bear market. If March 2023 becomes the final market low and the start of the bull market runs, investors may find opportunities there. They’ll need to have a strong stomach, though. The evidence for a change will take time to appear. Bear markets don’t last forever after all.”

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img