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The First Half of 2022 Experienced Its Worst Performance in Decades for the Stock Market

Originally published on Best Stocks

Source: Getty Images


Investors started the second half of 2022 with the same anxieties that made the first half the worst start to a year since 1970: rising inflation, higher interest rates, and a bigger danger of a U.S. economic recession.

On Friday, futures for the Dow Jones Industrial Average DJIA fell 100 points, or 0.3 percent, after Thursday’s 253-point drop. A 0.4 percent drop in the S&P 500 SPX futures, with the tech-heavy NasdaqCOMP expected to decline 0.5 percent, was predicted by the futures market.

Tokyo’s Nikkei 225 fell 1.7%, while the pan-European Stoxx 600 fell by 0.1%.

The first six months of 2022 were the worst in decades for the stock market, and it doesn’t appear like it’s going to get any better anytime soon.

Jim Reid, a Deutsche Bank strategist, remarked, “The good news this morning is that [the first half of the year] is now finally finished.” As of this writing, “if you want the bad news, it is that there isn’t much positive news available as we start [the second half] and U.S. equities futures have already fallen… in the first few hours of the new half-year.”

Investors fear that the Federal Reserve will continue to aggressively raise interest rates and tighten monetary policy since inflation is at a multi-decade high. Raising borrowing prices to reduce economic demand has the potential to trigger a recession.

The S&P 500 and the Nasdaq have both fallen more than 20 percent this year because investors fear rising interest rates and a downturn in the economy. Stocks are unlikely to rise much unless inflation and the Fed’s direction are more clearly defined.

Equities tend to perform better in the second half after bad [first-half] performances.” There are more and more signs that a recession is on the horizon,” said Reid. “It’s not so clear where things are going this time around.” There was just a modest fall in May’s core personal consumption expenditure (PCE) inflation, which is the Fed’s favored inflation measure.

As Hargreaves Lansdown trader Susannah Streeter said, “fears rocking financial markets show no sign of dissipating, with investors worried over signals of imminent recessions while inflation continues stubbornly high.” Concerns have been raised that the Federal Reserve and other central banks may have to pick up the accelerator on interest rate rises to cool down the heated prices.

Copper prices are the latest indicator of concern about the global economic outlook. Since January 2021, continuous-contract futures for the metal have fallen more than 3% to below $3.60 per pound.

When it comes to manufacturing, copper is one of the most useful and vital metals since it is used in everything from electrical wire to pipelines. The price of copper, known as “Doctor Copper,” serves as an indicator of the health of the world economy.

Purchasing managers indexes (PMIs) and the ISM manufacturing index from the United States will be released tomorrow and will provide more insight into the current state of the global economy.

Bitcoin’s value has increased marginally during the last day, but it remains below the crucial $20,000 level. It rose from $18,700 to $20,700 in the late hours of Thursday before tumbling again.

The following are four equities that might see some movement on Friday:

Shares of Kohl’s (KSS) fell 13% in premarket trading in the United States on news that the retailer had halted its acquisition talks with Franchise Group.

On the day after Micron Technology (MU) announced that its fiscal fourth-quarter financial results would fall significantly short of expectations, semiconductor stocks were in the red. On the premarket, Micron shares were down 5%, Taiwan Semiconductor Manufacturing Company lost 4%, and ASM International was down 5% in Amsterdam’s trade.

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