It's been months that people are forecasting a big decline in the stock market but it hasn't happened and it won't happen in the future with the FED slowing the hiking of interest rates.
In the last 6 months the Dow Jones is up over 7%, the S&P is up 1,35% and the Nasdaq is down 2%. All this amid one of the fastest interest rates increase in the last century, trade war with China and lockdowns, war in Ukraine, energy crisis, quantitative tightening, crypto crash, inflation crisis and strong dollar that caused headwinds for almost all companies. If all that didn't tank the market in the last 6 months, nothing will. If you think a mild recession in the US will cause the stock market to drop hugely from this level you're delusional because we already know a recession will happen and it will be counterbalanced by the FED pausing the hiking of interest rates and maybe China reopening.
We're seeing that the job market is still strong and as long as people are getting paid and have a job the demand won't collapse. The job market will cool a bit, enough to reduce inflation but we won't have massive layoffs…only some companies in the tech industry saw some big layoffs but that's because they hired way too much in the first place when the times were good.
Energy and commodities prices are also down a lot and that was the biggest contributor to inflation, the CPI will decline every month and in 2023 it will be helped by favorable comps with last (this) year.
From now until the next quarter results I see nothing going on for the bears. The next big announcement will be the CPI in December and it will be favorable given how energy prices have collapsed. Then the FED in December will hike either 50bps or 25bps and the market will cheer by the slowing down on the increases.
This is a great time to buy if you are a long term investor
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