Markets rallied in relief on some better-than-expected data on Friday. It was a bright spot in what has seemed like a relentless parade of bad news. But the Dow, S&P 500, and Nasdaq still all closed out the week with losses. Is this the bottom of the bear market?
For the past few months (years, really) it seems like there's a 24/7 stream of bad news bombarding us all the time. Markets, the economy, housing prices, grocery store prices, gas prices, and that whole COVID thing that's still happening. It's a lot. So, what do we do?
Well, it happened. Stocks slid into bear market territory after a bad May inflation report showed that prices rose at the fastest pace since 1981. Should I be worried about the markets?
Is the world more uncertain right now than it has been in the past? Or are we simply more aware of our lack of predictability and control?
"Unprecedented" events can happen much more often than we'd like and make predictions nigh impossible. The world changes not gradually but in accelerated bursts that can leave us clinging to old trends and expectations that no longer fit our new reality. Here's why it's going to be OK:
The latest selloff was largely driven by concerns about how the pace of Federal Reserve interest rate hikes could affect economic growth. The Fed's "hawkish" policy of rapidly raising interest rates to bring down inflation seems likely to take a chunk out of economic growth. Is a recession or bear market on the way?
