After almost a month break, I am back writing my closing bells post. Work and personal commitments kept me writing these posts regularly.
A lot has changed in the market in the last four weeks. It is with great pleasure we see some upside to the market, although today seem to be a wide spread down day on all three major indices. VIX is larking around 20-21 range. Remember, just a month or so back, it was around 30!
Despite all these positive news, major analysts predict that a mild to a severe recession is facing us perhaps early to mid 2023. One can argue, we are already in a recession as GDP growth has been negative for two consecutive quarters. Here is a great article on how economists determine, if we are on a recession.
Biden administration passed an impressive “Inflation Reduction Act” that may aid the market. Although, some experts argue, the additional government spending (almost a trillion dollars) may put gasoline on inflation fire that is burning out of control. Speaking on inflation, we continue to observe a slight downward trend in July which was accepted widely by the market. Gas prices has been consistently going down which is also a positive sign that we may end a soft landing and avoid a recession.
Retail investors need to be cautious now than ever in my opinion. This is a difficult time, and the 2020, invest and get 100 % return on most stocks are gone. Now we see traditional 10-15 % return, if we are lucky. Most portfolios have been slashed 40-50 % depending on how aggressive your investment strategy is. Despite, all this caution, US economy is one that is strong. Most do not win betting against this giant. In my opinion, the US market will again see a bull trend, however, there maybe pain before we get there for sure.
- Cash out for next moderate/severe inflation (2023 most likely)
- IBM shares slide after company trims cash forecast
- China holdings of U.S. debt fall below $1 trillion for the first time since 2010
- Netflix investors brace for subscriber losses as company works on long-term fixes
- New Buy Rating for Tesla (TSLA), the Consumer Goods Giant
- Analysts Confident in Tesla’s Strong Growth Outlook Despite Q2 Slowdown