Stock Market Forecast
US stock markets suffered a wild week and one of the worst since 2016. Stock market experts are clamoring to explain the losses with most pointing conveniently to Fed threats.
Yet earnings are beginning to suffer and tech stocks in particular are not attractive. They’re saying valuations are truly ridiculous and investors are starting to listen and sell their stocks.
NASDAQ dropped 13% in the last 2 weeks and down 7.5% on the week to 14597.74, and is down 5.8% in just the last 2 days. It’s almost down to its levels of one year ago. The S&P is down 4.4% in the last two days o 4447.55, and the Dow has dropped 4.6% this week and 3.4 % in those 2 days and is at 34,583.29.
Fed money appears to have stopped flowing and supply shortages are crippling the economy and it appears the Fed government has little ability to do anything about it. And with the constant market reversals, many investors are getting scared. Bond yields are rising.
There are predictions of a big correction of up to 20% happening as the Fed weighs its options to raise rates and kill inflation. NASDAQ has quietly sunk 13% with perhaps a bigger drop about to happen. Is this the much feared stagflation period or is it just short period without positive signals and no Fed stimulus?
Biden and Democrats are under tremendous pressure to deal with opposing economic threats where everything they so seems weak or annoying to Americans. Investors are getting a look at the real US economy without trillion dollar stimulus aid. With excessive prices, rising wages, and rising interest rates, the forecast outlook has darkened a little. Optimism reigns, but the next 2 months will be a test. See more on the outlook for the next 3 months, the 6 month spring 2022 and 5 year stock market outlook.
Some believe the days of big tech returns are over and the Dow Value stocks are ready to surge.
The forecast for 2022 is actually much brighter than some big brokers and economists predict. The global and US economic recovery will more fully evolve. The global economy is expected to surpass $100 trillion dollars with $20 Trillion in the US alone. Investors are weighing their buy the Dip opportunities where the next round of big winners will seed their fortunes.
The S&P Dow and NASDAQ indexes continue their slide today. As you can see the Dow has climbing toward a 1% drop. Oil stocks however are bucking the trend and heading upward. Forecasts for $100 oil price is buoying the hopes of energy investors as supply side issues put the pressure on. Bitcoin and the crypto stocks are off to their worst start ever in 2022 but that buy the dip opportunity is excellent for many investors.
The big question for investors is when is the best buy the dip opportunity? The answer might be to listen to the experts cite the weakest stocks, wait for the correction to deepen, and then make your picks.
Current Major Indexes
S&P 500 : 4,397 ↓
Dow Jones 30 : 34,265 ↓
Nasdaq : 13,768 ↓
Russell 2000 : 1,987 ↓
Crude Oil : $84.83 per barrel ↓
Gold : $1,836 per ounce ↓
US Dollar : $95.64 ↓
Projecting which sectors are bound to hit bottom the hardest is a key matter.
Expert Forecasters Projecting Excellent Growth
Brad McMillan CIO of the Commonwealth Financial Network is projecting 7.5% nominal economic growth and 3.5% real economic growth in 2022. Those are positive numbers.
The Fed has forecasted 3 rate hikes next year, and tapering their bond purchases along with inflation worries. If inflation is the threat, then the stoppage of the Dems spending bill will keep inflation under check for now. Additionally, the President announced heightened regulations on gasoline which drives gas prices higher. The oil price forecast is for $80+ oil in 2022 it’s already back up to $73. See more on stocks prices and market forecasts for the next 3 months, 6 months and 5 years below.
Most forecasters are modifying their outlook now heading into the new year of 2022. Another big issue is in the Democrats spending bill being cancelled. It looks like they’ll have to redraft it completely, for reintroduction later in 2022. the supply chain bottlenecks are easing, but the Covid outbreaks might continue hamper global shipping once again.
The tech sell off always happens when interest rates rise and inflation continues. Tech and consumer discretionary stocks were dumped as the talk is about inflation and rising rates. See more on the best stocks to buy.
One energy analyst believes oil will rise back above $100 in 2022. WTI oil dropped to $83 on Friday. Rising interests rates may dry up investment in oil drilling and low oil supply, and with growing transportation demand, will lead to much higher and lasting oil prices. The shale oil companies in the Permian basin are increasing drilling rigs. I think it’s safe to say oil stocks should do well.
Forecasts for the S&P
Bank of America forecasts the S&P will be flat next year rising only to 4600, however it’s already hit a record of 4799 during a dark moment. On the other hand Goldman Sachs’ predicts the S&P 500 will rise to 5,100 (+12%) by the end of 2022. That’s well down from 21% growth during 2021. JPMorgan is projecting a 10% S&P gain to 5,050. Morgan Stanley is predicting an S&P drop from 4500 now to 4400 in 12 months.
Market Changes This Week
This week brought both anxiety and discouragement to the markets. Today and yesterday was particularly awful. However, what drives optimism is the continuing recovery. Omicron is still threat, but everyone is expecting it to pass by spring.
Holiday spending is hitting record highs and consumers have lots of cash. They’re pessimistic right now, but as spring approaches and Covid fades, the pace of spending, employment and production will increase.
As the supply chain issues ease this winter and booster shots get administered, return to work will be in full swing. GDP should grow modestly in 2022 by 2.1%. Stimulus funding might be delayed until the spring. But some sort of deal will get struck and stimulus will power growth. Big picture looks good. Interest rate rises are off in the future and when the Fed tries to raise them, the government will be hit with a torrent of hate. In an election year, it’s doubtful they would have the courage to do it.
Economists view of the recovery (6 month 5 year and 10 year outlook) is a little weaker and some speculators may be pulling out, or at least preparing to invest differently. Lots of volatility, so those who aren’t long term investors are confused about what to buy next.
For investors, it is still a challenge to search and find the best stocks to buy. Some stock investment advisors such as Jim Cramer are negative about buying the dip. They’re getting bearish. If investors stop believing this is not the bottom of this downturn, then we could see stock prices really decline. Tom Lee, Fundstrat’s Global Advisors head of research however is on the other side saying right now is a good time to buy the dip.
Surprisingly the Tesla stock price isn’t down much, while Bitcoin is down $1400 since Friday morning.
Best Performing Stocks
We laughed at a potential stock market crash, but todays at least keep us sharp on market reactions. Long term focused investors probably aren’t sweating too much over this. Check on more crash proof stocks.
There’s lots of political folly suppressing some stocks (i.e., oil stocks and bitcoin stocks) but the fundamentals of demand and supply will lift them back. Don’t bet against oil and Bitcoin. Technology and global fiscal problems will drive adoption of Bitcoin. It’s passed the critical mass point and you should have crypto in your long term strategy.
Covid outbreaks and inflation or not, the stock markets should continue to do well in 2022, with the Dow Jones, S&P and NASDAQ constantly bumping up against record highs. 2023 is a little dicey due to political squabbles. But US GDP should be much higher and the jobs reports are getting brighter. Supply chain issues just ease the China trade deficit, so they may actually be a positive going forward.
The Dow has been skittish, with inflation and high material costs and supply chain problems marring the delivery of products. NASDAQ has been doing alright as long as there’s no mention of higher interest rates.
Top Losing Stocks
Netflix shocked investors with an almost 22% drop in one day. Shopify, Coinbase and Carvana rounded out the top losers as most sectors took a dive. Crypto is losing favor and there is concern Bitcoin is about to dive.
Best Stock Picks
Everyone is challenged with picking winners now. You could buy ETFs and mutual funds if you want be be safe, but they’re down right now. That makes you wonder what’s going to happen in 2022. Which equities are the best stocks to buy right now?
Definitely visit Barchart.com to get a good picture of the best performing stocks including those with the best weighted alphas. It’s important to know which are hot and find out why. As you can see the energy stocks are hot because smart buy the dip investors are grabbing them up at bargain prices. 2 years from now, they’ll be laughing all the way to the bank.
These stocks were the favorites until this last correction. By March, these stocks might be back in favor. Everyone’s waiting for the low point of the dip. Which will hit bottom harder?
I’m not Cathy Woods, but I like cryptocurrency and oil stocks are golden. The Democrats might have their quest to sell climate change as part of their branded propaganda, as a rallying call, but the rest of the world only cares about food on the table. Any anti-oil participation will be short lived as oil and other energy products prices soar.
Right now Bitcoin, Bitcoin stocks and oil stocks are bargains. The reasoning behind the eventual acceptance of cryptocurrency is solid. Crooked governments like China will fight Crypto because they only understand their fiat currency and how they manipulate/print it to gain trade advantages. But crypto is an advanced currency that serves a multitude of purposes.
Further, there is nothing to say that every country can’t have their own cryptocurrency which is where we’re headed. As long as governments can print more free money, they have no opposition to it. So what happens to Bitcoin? Bitcoins is evolved and buyers like it. That has value.
Tesla might not survive the EV evolution but people like the Tesla because it represents some kind of technology and cultural wave they think they’ll benefit from. So Tesla will be around for a while before the next generation gets rid of Elon. Today TSLA is down hard. Powerful brands have big value, such as Facebook, Google, Amazon and Apple. They do last, especially if they can keep their monopolies. You can invest in Faangs but you won’t get rich.
Investors are in volatile period and more are looking the best stock market forecast for insights and guidance. See the 3 month, 6 month, 5 year and 10 year outlooks for ideas. With the recovery in progress, added stimulus spending, and clearing of the supply chain bottlenecks, the economic forecast looks good.
Consider that inflation isn’t really a big problem for corporations who pass the cost onto consumers, and Americans have plenty of savings and are returning to work. That paints a robust scenario for all sectors.
Rising employment is positive, and reduced Fed spending will keep the economy from overheating. Certainly politicians and the media can create negative waves, but investors just seem to shrug it all. Experts and hedge fund managers bad mouth individual investors, but this is the era of the individual investor. Investors don’t require advisors and are using do it yourself resources of the big stock market websites to help with the best stocks to buy.
It should be pointed out that the S&P is just recovering from what it was at 14 years ago. The S&P is where hedge fund managers and advisors through their money. Take out the few best performing stocks such as IBM, and the S&P looks bad. Clearly, money has pursued other more profitable ventures.
You’re on the hunt for the next best thing in investments, and I hope I can help you find it. Myself, I’ve purchased a Canadian oil stock called Athabasca Oil and Canadian cryptocurrency company HIVE. Canadian oil stocks are worth investigating (not advising you to buy) because the Republicans will open up to Canadian oil pipelines when they return to office.
Hive operates in low cost, cool climate Canada, and has taken on $100 million in new financing to make them a major Bitcoin and Ethereum mining company. They’re smart and being competitive. Bitcoin just reached another record near $70,000 per coin. Amazing potential, but big risk. See more Bitcoin stocks.
These companies have been deeply held back and therefore have the biggest upside should the oil market return. When the price of oil surpasses $100 and stays, these companies will be immensely profitable. As the Canadian pipeline is built to the coast, that supply will find a global market.
There is no way the world can operate without oil. Suppressions of oil simply raises prices and damages economies. Oil and Nat gas are needed to help produce the electricity the green revolution devices need (EVs and crypto mining).
Last week, investors seemed undeterred by Fed tapering, rising bond prices, supply woes, American vaccination rate, rising energy prices, and government debt and deficits. The bull run will continue. Job losses were expected last week, the reverse happened. It was an excellent jobs report. and it prospects of bringing back jobs from China is improving too.
Top Recommended Stocks This Week
Looking for the latest stock prices and best stocks to buy? More experts believe inflation might not be so transitory and energy prices could make this a painful winter for consumers (So far this has been true). However, analysts such as Fundstrat’s Tom Lee believe the big rally is on and he’s confident Bitcoin price will hit $100k. I like Tom’s optimism. A bitcoin forecast price of $100k isn’t outlandish now and experts believe Coinbase is a good bet too even if it took a beating recently.
Definitely, the oil and gas markets will continue to be big topic as we enter the deep winter. Millions of people can’t afford high nat gas prices and economic issues will come to a boil soon.
Yahoo Finance reported that Art Hogan, chief market strategist at B Riley-National, said “What we have done, in large part, by having massive aggregate demand outpacing aggregate supply is likely not destroyed demand. We likely delayed demand… And I think that elongates the economic cycle into ’22.” That makes for a strong stock market forecast for 2022 in the US, but perhaps not as bright a China stock market forecast.
Top 30 Stocks to Buy
These stocks are performing well over the 1 month, and year to date period. Stocks to take seriously right now.
Forecasts 3 Months to 10 Years
If the US government and GOP stay calm, we’ll only suffer a slow 3 month period and then it’s back to the races for the next 6 months, next 5 years and next 10 years. The forecast for Monday opening and next week is to the upside. Earnings reports are still coming in stronger than predicted, for most stocks anyway.
As I predicted a few Democrats did not support the 2500 page spending bill so the $3.5 Trillion big spending party won’t happen. Now it’s $1.75 Trillion and its full of items the Republicans don’t want. They might kill it completely if some the Dems balk on it. The debt default vote and spending bill will happen all on the same day in December, designed to pressure. So, likely one of them will be dead.
We spoke of the stock market crash catalyst and right now, that catalyst is political. Explore the crash signals that may play into how long you’ll be keeping your stocks. See the 5 year and 10 year forecast and starting thinking deeper into the future. That day will come.
Combine the unsettled activity this week with lower consumer confidence, debt ceiling defaults, political gamesmanship, persistent inflation, high energy prices, out of reach housing prices, fears of rising interest rates, reduced Fed spending, and a prolonged pandemic slowdown, and you can understand why markets might sag.
However, predictions still say 2022 will be a very good year. The pandemic ruined the 2019 party, but it will disappear globally by next spring as more vaccines are issued. That means you might want to be ready to buy this next big dip and find the best stocks to buy. Check out the Dow Jones, S&P, and NASDAQ posts for opportunities, and discover more about Bitcoin, Tesla, Apple, Oil stocks, and the 2022 best picks page for more great stocks to buy.
Although markets sprung back from the recent dip, there is plenty more volatility coming in the next 6 months. October is often a bad month, but again, it creates buying opportunities. So, for smart investors, it’s more like a feast!
Top Market Sectors
Energy and Consumer Discretionaries outperform by far this week.
The question will be about how and if the US economy can regain its competitiveness. China’s financial and political tensions are beginning to push manufacturing out of China and back to the US. The supply chain woes (oil, microchips, electronic products) could affect supply for more than a year. Right now, containers are stuck in US ports and can’t be returned to China. The supply issue could contribute to significant inflation. A shortage of 80,000 truck drivers is further undermining timely supply to retail markets.
The direction of the US dollar will be important for the 5 Year Forecast. and the 10 year forecast. The outlook is for a rising dollar which will erode US competitiveness, particularly with China. The role of Bitcoin and other cryptocurrency may play into US dollar value and into US competitiveness. See the Bitcoin Forecast.
The ending of Federal stimulus checks for tens of millions of Americans is without a doubt affecting sales and consumer confidence. Then there’s inflation and government shutdowns ahead. It’s a bad time for negativity as we enter the holiday shopping season.
Below, you’ll find more charts, data, and insights about the best stocks to buy, and links to valuable resources to help invest wiser and a simple, clear fashion. Data changes week to week and can be a source of confusion.
Google/Alphabet, Amazon, Tesla, Facebook all reported big earnings but it’s all in the rear view mirror. Google had consistently beat earnings expectations and the result is continued upward pressure on Google stock price.
And the meaning of new infrastructure isn’t appreciated as much as it should. If the US wants to keep its competitive trade possession and ween off of China, it must have a similar modern economic and business infrastructure. The Republicans claim private business will invest, but such trillion dollar investments can only come from the government. Unfortunately, much of the bill is being used to prop up social programs and fund some bankrupt states. The more they think about the bill, the more likely it will be cancelled.
See more on the best picks for 2022 and best tech stocks to buy and which stocks you may want to part with. Why 2023? 2023 is the year we see interest rates rise and government stimulus easing and quantitative easing finally ending. It can’t go on forever.
Which oil stocks and gold stocks might be a good choice? If the 3 year, 5 year or 10 year outlook is your interest, you should definitely research 5G stocks. 5G technology will underpin more of the consumer and business communications market. It’s high speed with anywhere connectivity and is spawning many new for profit business models.
What are the Biggest Threats to the Stock Market?
Stock market investors and those invested in the real estate market are trying to visualize the key threats that might cause a lot of pain. If you read the stock market crash report, you’ll get a good look at all the crash signals and factors that may lead to big investment losses. Pay attention to those stocks that might be good hedges against a correction or downturn and which securities you should not buy.
Will There Be a Stock Market Crash?
Within a realistic outlook, a stock market crash seems unlikely, however you should still be up on all the factors as they change and combine to present threats to the markets. Choosing stocks that will survive a crash is good and you should know more how to hedge a crash as smart management of your IRA, 401k or RRSP.
Predictions: As for today and tomorrow, next 3 months, next 6 months, or next year, the outlook is positive but maybe not to the satisfaction of some investors. With such bubbly activity, the worry is a high speed wobble (volatility) and a crash of the stock markets, and perhaps even crashing the housing market. This turbulence will reach the housing market and encourage homeowners to sell their house fast.
Retail sales rose only .6% in June, so it looks like the great overheating is overdone. GDP for the first quarter was up 6.4%. The economy may be growing at above 10% rate this 2nd quarter. The cyclical change is still rolling along which is why investors are feeling confident. However, there’s a lot of phoniness in this market with Tesla, Bitcoin, Dogecoin, AMC and other stocks flying high.
Which are the best stocks to buy today/tomorrow or in the next 6 to 9 months? Which will be hottest stocks during the coming fall season? There are other stocks not reflected in today’s hot Wtd Alphas but will perform well in 2022.
Those investors unable to pick big winning individual stocks are turning to ETFs in droves. The new Bitcoin ETF has caught their fancy and oil etfs have too. Check out Oil ETFs too.
Investu says you can avoid picking individual inflation boosted stocks by investing in these funds:
- IShares S&P GSCI Commodity-Indexed Trust (NYSE: GSG)
- Global X Internet of Things ETF (Nasdaq: SNSR)
- Vanguard Real Estate ETF (NYSE: VNQ)
- Invesco DB Base Metals Fund (NYSE: DBB)
- SPDR Gold Trust (NYSE: GLD)
Tech has been hot. Investors should investigate the best tech stocks, including Facebook, Amazon and Tesla. Tesla is up $21 in the last 2 day. Check out the oil stocks, 5G stocks and find those that are ready rise in value.
US GDP to Grow 3.5% in 2022
US Gross Domestic production grew 6.4% in the 1st quarter, and 6.6% in Q2, no doubt meeting the approval of investors. However, GDP forecast for 2022 is 3.52%.
Is anything still holding back the stock markets right now? Three things: resistance to $5 Trillion spending plan, Fed tapering, and the belief that interest rates have to go up sometime. Smart investors look 6 months to 5 years down the road to when today’s decisions will be experienced in reality.
Inflation a Threat on the Horizon?
Governing politicians and other “experts” told us inflation is transitory. However, with Trillions in government spending forecast for the coming years, and low interest rates continuing, along with supply chain bottlenecks, it is fertile ground for record breaking inflation. The danger here is the government overreacting to the inflationary trend and sending negative waves into the economy. Overreacting to the oil sector (while China and Russia ignore) is one sign the US government isn’t poised and in control.
“With the economic outlook brightening, Covid-19 cases falling and more fiscal stimulus on the horizon, nervousness about inflation is percolating. That means pricing power is set to become an intriguing alpha generator due to the wide variance in how companies cope with it” according to Tobias Levkovich, Citigroup Inc.’s chief U.S. equity strategist.
You should be hedging your investments with good stock selection. Charlie Munger says diversification is for idiots. Pick the best horses to win. Everyone seems to believe inflation is going to be an issue for the economy and for listed companies. Here’s a few stocks CNBC/Insider Monkey believes will weather the inflation storm:
- Newmont Corporation (NYSE: NEM)
- AT&T Inc. (NYSE: T)
- Medical Properties Trust, Inc. (NYSE: MPW)
- Dollar General Corporation (NYSE: DG)
- Activision Blizzard, Inc. (NASDAQ: ATVI)
- Etsy, Inc. (NASDAQ: ETSY)
- Philip Morris International Inc. (NYSE: PM)
- Oracle Corporation (NYSE: ORCL)
- Colgate-Palmolive Company (NYSE: CL)
- Adobe Inc. (NASDAQ: ADBE)
- The Procter & Gamble Company (NYSE: PG)
- Aspen Aerogels, Inc. (NYSE: ASPN)
- Zoetis Inc. (NYSE: ZTS)
3 Month Market Forecasts
Factors affecting the Stock Market
- economy had a meager showing in the 2nd quarter 2021
- inflation rises and low interest rates pushing treasury and bond prices down
- markets climbed as investors seem optimistic
- corporate earnings are doing well in the 3rd quarter
- Fed says they’re not going to raise rates until 2023 perhaps
- $5 trillion sitting in money markets
- Oil prices rising which means higher gasoline prices and transportation and manufacturing costs
- S&P, and Dow, NASDAQ and Russell 2000 still have room to grow
- new government injecting possibly $5 trillion into the economy?
- jobs reports okay but not great
5 Year Long Term Forecast is Optimistic
Just a little discussions on the 5 year stock market forecast (and 5 year housing market forecast ) look really good too because the American consumer is well employed as business is rebuilt from the ground up. Intent to buy homes is strong and construction rates will grow fast through the coming spring as labor and supply shortages ease.
The latest US jobs report is good. The 2022 to 2026 5 year projections are not priced into the market, but instead is focused on current earnings/sales and wishful thinking over the 5 year term.
Bank and Broker Forecasts
Goldman Sachs projects GDP will grow at a 5.3% pace through 2021 (so far so good) and predicts a lower unemployment rate at 5.3%. They expect the S&P to rise 17% to 4,300 points, driven by an expected 30% growth in corporate earnings.
Those US companies are becoming lean and powerful, and those who survive the pandemic will be unusually competitive in 2021. The question for some investors is whether airlines, cruise lines, hotels and other sectors are good long term buying opportunities, or whether buying more Tesla, Facebook and Amazon stock is the safer route. Some believe they’re a good buy during a coming market correction. Buy the correction they say.
Final thought? 2022 looks really good, but if global markets crash due to lingering Covid infections, a stock market crash and housing market crash would be simultaneous. Optimism is a great catalyst, but you can see how periodic reality reaches the investor masses once in a while. Let’s cross our fingers for smooth sailing ahead.
More interesting insight: 6 Month Stock Forecast | Housing Market Forecast | Stock Market Today | 5 Year Stock Market Forecast | Stock Market Next Week | Stock Market Crash | Best Stocks to Buy | 3 Month Stock Market Predictions
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