The stock market is complex and generalizations aren’t always true. However, at this point in 2022, we can say one thing for certain: the stock market is in big trouble and the future looks very volatile.
In fact, in just over two weeks of trading into this new year, the stock market is down more than it’s ever been in history in one year during that short of a time period.
The S&P 500 alone is down by 11% so far in 2022.
How Bad Is It?
As optimists are pointing out, the stock market is still overall at very high levels. Yet, for those who have gotten in recently or were hoping for a course correction, things are looking very bad.
This drop in the stock market is the worse in 90 years on records. We have the Federal Reserve positioned to put more restrictions on the currency going forward and a big influx of US Treasury yields all pressing hard.
Then, you get into all the other factors weighing on the market, such as the prospect of a war between Russia and Ukraine, the instability caused by omicron, and the Bidenflation that’s been dragging down the economy…
You now have a recipe for disaster.
Who had Stock Market Crash and WW3 on their bingo cards today? Collect your winnings please.
— Mercury Retrograde (@JustDrew8055) January 24, 2022
Rough Road Ahead
Technical indicators are also showing there’s going to be a rough road ahead. Liquidity is at disastrously low levels and people are worried.
We can expect the S&P 500 to go down to 3,800 or less as inflation continues to hit and the chance of war looms on the horizon. The gains of the Trump years are being erased. Welcome to the Biden economy.
The country is in chaos and our markets are rolling like a ship tossed about during a tempest. Traders and regular Americans don’t know where to turn or what’s going to happen even one day or one week from now.
It’s not all Biden’s fault, but he’s making everything so much worse than it has to be. He’s undercutting America’s energy production and presenting a weak front against Russia in eastern Europe.
Look, this week there has been a lot of “bad” crypto news, there was also a stock market sell off. This crash won’t last forever. It’s a speculative and emotion driven market. If you stick around long enough, you will win. It’s not timing the market, it’s time in the market.
— Aleksandra Huk (@HukAleksandra) January 22, 2022
The Bottom Line
There are still some signs that this dip could be temporary and the markets could rally back up. There were small positives by the close of business on Monday on some of the stocks for the day.
However, the instability and deeper market issues that are happening won’t be reversed by wishful thinking or temporary wins.
Biden and his Democrat policies are sinking this country and our markets into very uncertain territory; the geopolitical disasters currently taking place, combined with COVID and inflation, are a perfect storm.
As investors do their best to navigate this wild market storm, let’s not forget how good things were under Trump. The left would like to tell us that was just a happy coincidence, but we all know better.