Money Sense

[DKG]

Stocks could be hit next year by the worst earnings recession since 2008. There could be an earnings recession that could be as big of a surprise to the market as it was in 2008. An earnings recession is likely not priced into the market yet. Another downside is coming. It all comes back to central bankers destructive high interest rate policy.

[JOE]

Stocks could be hit next year by the worst earnings recession since 2008. There could be an earnings recession that could be as big of a surprise to the market as it was in 2008. An earnings recession is likely not priced into the market yet. Another downside is coming. It all comes back to central bankers destructive high interest rate policy.

That's interesting DKG.



If this is the case when do you think it will hit bottom? In the 2008 recession the bottom wasnt reached until late 2009:



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https://moneymorning.com/wp-content/blogs.dir/1/files/2020/03/DJIA-Index-MM-Chart-1.png">



https://www.simple-stock-trading.com/stock-market-crash-chart-provides-valuable-lessons-for-beginner-stock-market-investing/">https://www.simple-stock-trading.com/st ... investing/">https://www.simple-stock-trading.com/stock-market-crash-chart-provides-valuable-lessons-for-beginner-stock-market-investing/



This chart conforms to DKG's warning about 'an earnings recession'.



https://www.simple-stock-trading.com/wp-content/uploads/2015/06/stock_market_crash_chart_SP500_2008.png">



I guess they keep telling us about a coming recession cuz its a warning that the US Fed isnt gonna prop up the markets or people like crypto investors anymore.

[Herman]

Stocks could be hit next year by the worst earnings recession since 2008. There could be an earnings recession that could be as big of a surprise to the market as it was in 2008. An earnings recession is likely not priced into the market yet. Another downside is coming. It all comes back to central bankers destructive high interest rate policy.

The bastards are deliberately taking money out of the pockets of retired folks. You do not have to be an investment pro like you to know high interest rates mean lower earnings which means lower returns on our savings. Fuck the Fed.

[DKG]

Stocks could be hit next year by the worst earnings recession since 2008. There could be an earnings recession that could be as big of a surprise to the market as it was in 2008. An earnings recession is likely not priced into the market yet. Another downside is coming. It all comes back to central bankers destructive high interest rate policy.

The bastards are deliberately taking money out of the pockets of retired folks. You do not have to be an investment pro like you to know high interest rates mean lower earnings which means lower returns on our savings. Fuck the Fed.

In bear markets, stocks don't typically fall in a straight line. The result of Biden's inflationary policies during the pandemic and the Fed's response will be fading economic growth and corporate earnings.

[DKG]

Wall Street's stock-market forecasts for 2022 were off by the widest margin since 2008. A year ago, equity analysts were penciling in the S&P 500 finishing 2022 at 5,264.51, according to FactSet data. That's turned out to be way off base: the large-cap index was trading just north of 3,800 as of Tuesday's close.



This year, however, Wall Street's top strategists have been more cautious, spending much of the time slashing their year-end stock-market targets as the Federal Reserve kept raising rates to fight stubbornly high inflation and causing volatility across markets, including stocks, bonds, currencies and commodities, to explode.



Stocks are likely to bottom in the first half of 2023 as the Fed's aggressive interest-rate hikes finally take their toll on the economy.

[DKG]

A new bull market for stocks won't commence until the Fed stops hiking interest rates. Additionally, investors need to have confidence in earnings expectations heading into a potential recession. It is hard to imagine volatility declining until we get clarity on Fed policy and corporate earnings power.

[JOE]

One analysis which points to further possible declines in 2023:

[Herman]

A new bull market for stocks won't commence until the Fed stops hiking interest rates. Additionally, investors need to have confidence in earnings expectations heading into a potential recession. It is hard to imagine volatility declining until we get clarity on Fed policy and corporate earnings power.

That makes sense. High interest rates are bad for everybody's bottom line.

[DKG]

The IMF is predicting one third of countries will be in recession in 2023. The key reasons are the ongoing restrictions in China, high interest rate policies implemented by central banks and the US paying for war in Eastern Europe. Other factors that have put the global economy on shaky ground was developed economies printed too much money.

[DKG]

Big Tech companies need to rip the Band-Aid off in terms of layoffs like Twitter did or it will threaten the macroeconomic picture for 2023.

[JOE]

Big Tech companies need to rip the Band-Aid off in terms of layoffs like Twitter did or it will threaten the macroeconomic picture for 2023.

So are you suggesting that the BIG Tech companies should start hugeswaves of employee layoff/firingss now rather than later, DKG?



Not suggesting this right nor wrong, just wondering.

[Herman]

Big Tech companies need to rip the Band-Aid off in terms of layoffs like Twitter did or it will threaten the macroeconomic picture for 2023.

A bunch of overpaid entitled brats anyway. Their companies get special treatment from national governments.

[JOE]

Tech's gonna go down even more in 2023.



The powers that be will try to limit the pain to that sector and crypto because its workers are mostly young. But they'll be more inclined to protect other sectors than tech.



So tech will continue to take the biggest hits of all.



One net benefit for the consumer tho. They should see a lot more deals crop up in 2023 as it will become a buyers market for hitech goods.

[Herman]

Ya, ya, whatever Joe.

[DKG]

U.S. stocks fell at the open on Thursday as investors responded to more data showing the U.S. labor market remained resilient in December despite the Federal Reserve's interest-rate hikes.



ADP private payrolls data showed 235,000 jobs were created in December, beating expectations for 153,000 new jobs, according to economists polled by The Wall Street Journal. The data also showed large increases in workers' pay.



Initial jobless benefit claims also declined last week to 204,000, the lowest level since September. Data on job openings released Wednesday showed more than 10 million job openings in the U.S., another sign that the labor market remains unperturbed despite the Fed's rate hikes and layoffs by financial and technology firms.



On Friday, investors will receive the monthly nonfarm payrolls report for December from the U.S. Labor Department.



Interest rates have to fall before markets can recover and unfortunately the Fed will not do that with a relatively buoyant job market.