Bear Market Confirmed, So Time to Start Buying

U.S. stocks continued to fall Monday as the Dow Jones (ticker – US30) entered into the first bearish zone since the beginning of the pandemic, as investors consider current economic growth and the cost of Federal Reserve efforts to control inflation.  Bear market is defined on Wall Street as a drop of 20% or more from a recent high.  Traders will focus on the outlook for interest rates and possible weakness from the two consecutive periods of declines this year.

Last week, the Fed issued another big rate increase, and hinted that more large increases are likely to continue. U.S. government bond prices fell again, increasing yields. The yield on 10-year notes rose to 3.878%, which is the highest level since 2010. The U.S. dollar grows stronger, as higher interest rates drive the powerful dollar rally, which dropped the British Pound to it’s lowest price in 40 years! UK 2-year bond yields are presently higher than the 10-year yields!

Asian markets fell yesterday, following the drop in U.S. markets on Friday. Oil prices continue to drop as traders predict that slow economic growth may lead to less fuel demand.

With all this uncertainty, I believe the market is nearing the bottom, and smart investors should prepare to begin DCA or “Dollar-Cost-Averaging” into strong US companies, tech stocks, and the GPB. Investors expect to see more volatility going into the end of 2022, but also great opportunities to create a strong financial foundation by entering the market at discounted prices.

 

Analyzed by: Mr. George Black, Independent Analyst

Disclaimer:
Goldwell Capital Co., Ltd. endeavours to ensure the accuracy and completeness of this research report. However, as the market is subject to change, the Company and our subsidiaries do not guarantee its completeness and accuracy, and the information is for reference only. Any person shall not regard such information as Goldwell Capital Co., Ltd. on leveraged foreign exchange, precious metals, stocks, and other financial products to provide real quotes, suggestions, solicitation and inducement of investment. Guests should be aware of the risks involved in the investment, the volatility of the investment market and the risk of loss can be very big, guests must carefully consider their own financial situation and investment purposes, to decide the direction of investment and the kind of investment products that are suitable for their owns.
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