The US stock market fell for a third-straight session on Friday after manufacturing data added to concerns the economy is headed into a recession—steepening losses that have pushed major indexes to the lowest level in more than a month amid volatility stemming from a swath of options set to imminently expire.
“Markets are largely abandoning hope” that easing price pressures will convince central bank officials their job in taming inflation is done, says analyst Adam Crisafulli of Vital Knowledge Media. He notes the pessimism will likely continue over the coming weeks, with the next consumer price index report not slated for release until January 12.
Though she acknowledges expected stock-market volatility could continue into the first quarter, Laffer Tengler Investments CEO Nancy Tengler says she believes it’s now time to start buying stocks during the selloff. She points to waning inflation as a looming benefit for stocks, and she points out stocks in 1982—another period plagued by high inflation—started rising again a few months before the Fed changed its hawkish tone on interest rate hikes. After that, they recouped all their losses in just three months, Tengler notes.
Stocks have struggled since the Fed started raising rates in March. According to Goldman Sachs, 2022 is likely to end up as the sixth-most volatile year since the Great Depression. After surging nearly 27% in 2021, the S&P is down nearly 20% this year, and the Nasdaq has tumbled 32%.
This article was first published on forbes.com
Further Reading
Dow Plunges Almost 800 Points After Retail Sales Post Biggest Drop In Nearly A Year (Forbes)
Stock Market Braces For ‘Volatile’ Trading In Coming Weeks—Here’s What To Expect (Forbes)
Fed Raises Rates Another 50 Basis Points—Signals More Hikes To Come Next Year (Forbes)