The first half of 2022 was rough for the stock market, and strategists say 2022 isn’t looking much better. Last week, the S&P 500 closed out its largest first-half decline since 1970, falling 20.6% since the beginning of the year. Experts expect this downward spiral to continue. In a research note for investors, Jim Reid, head of global fundamental credit strategy at Deutsche Bank, said, “The good news is that H1 is now over. The bad news is that the outlook for H2 is not looking good.” Now, talks of a recession are booming from Wall Street to Washington.
The second half is ‘not looking good’: Strategists on how to weather the market storm
The first half of 2022 was historically dismal for global stock markets, and strategists think there are dark clouds on the horizon and some way to go before the storm blows over.
The S&P 500 closed out its largest first-half decline since 1970 last week, down 20.6% since the turn of the year. The pan-European Stoxx 600 ended the half down 16.6% and the MSCI World dropped 18%.
A range of other asset classes also saw significant losses, including bonds. The traditional “safe haven” U.S. dollar and certain commodities, such as oil, were among the few exceptions to an otherwise ugly six months.
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No more whispers: Recession talk surges in Washington
President Joe Biden says “there’s nothing inevitable” about a recession in the U.S.
He is an increasingly lonely voice about that prospect.
From Wall Street to Washington, whispers about a coming economic slump have risen to nearly a roar as the Federal Reserve ramps up its battle against the highest inflation in four decades.
Price spikes and the Fed’s aggressive interest rate hikes sent the benchmark S&P 500 stock index tumbling to its worst performance in the first half of the year since 1970. Consumer confidence has sunk to record lows. And economists are increasingly worried that a downturn will not only happen but happen soon — a danger underscored by one widely watched Fed growth tracker.
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Kitco News/Anna Golubova
Crypto winter impact: 50% drop in the number of active crypto users, says Bank of America
The crypto bear market is directly impacting the still very new industry, with Bank of America reporting a more than 50% drop in the number of active crypto users between its peak of one million in November and just 500,000 users in May.
The bank cited internal data, pointing out that the decline began long before the massive selloff in June. Also, according to the bank’s survey, negative sentiment towards crypto increased between April and June as the overall crypto market cap tumbled below $1 trillion following broad selloffs, contagion risks, and the TerraUSD collapse.
“The Bank of America survey of the U.S. general population found that sentiment towards cryptocurrencies soured between April and June, with a rise from 21% to 30% in those saying they haven’t invested and have no plans to do so,” the bank said. “Relatively few people view crypto assets as a reliable long-term investment.”
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