The market lost 9.94% since the end of July this year. It was a brutal decline. Selling had only a few bounces but new sellers came in and pushed the markets lower pushing it into a correction territory.
It is perfectly normal and to be expected correction. Too soon after a recovery from the not so distant bear market, but still normal. The question is, will we stop here? This may turn into deeper declines and turn the recent rally into a bear market bounce erasing all bulls hopes.
Economically, this makes no sense. The US economy shows strength and growth. GDP growths, retails sales grow, consumer confidence grow, the labor market is strong (not a recession when everyone loses jobs, not gains them)… so the only reason for this selling is the fear of “higher for longer” interest rates. That is not sustainable and at some point this fear will go away. In the meantime, we have to wait this out.
How frustrating this is compared to easy market in 2021, right?
Tomorrow, we will see a report on the current inflation, so be prepared for another market’s haphazard reaction in any direction. If the repost shows easing inflation, the markets will rally. If not, more selling will come.
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