Biden's America: The Stock Market Is Officially Having the Worst Start to a Year Ever
The stock market is off to a dismal start this year — in fact, it’s the worst ever for the S&P 500.
Axios reported that as of the end of trading on Tuesday, that index had declined 8.6 so far in 2022 — the biggest drop to start a year in the history of the S&P 500 going back to 1929, according to Ned Davis Research.
The previous worst start was 8.57 percent in 2009, during the Great Recession under President Barack Obama.
All three major stock indexes fell on Tuesday, The Wall Street Journal reported.
The S&P 500 fell 53.68 points to 4,356.45 points (a 1.2 percent drop).
The tech-heavy Nasdaq Composite dropped 315.83 (2.3 percent) to 13,539.29.
Finally, the Dow Jones Industrial Average fell 820 points at one point before rallying to close down 66.77 points (0.2 percent) at 34,297.73.
Last week, the Nasdaq dropped more than 10 percent from its most recent high, The New York Times reported.
The stock market isn’t the only aspect of the economy that’s in turmoil.
“The bond market is also in disarray, with rates rising sharply and bond prices, which move in the opposite direction, falling,” the Times’ Jeff Sommer noted Saturday.
“Inflation is red hot, and supply chain disruptions continue,” he wrote.
One key factor is interest rates. Since many are seeing trends that could indicate the worst financial damage from the COVID-19 pandemic is over, the Federal Reserve is tightening things up and ushering in higher rates, Sommer said.
But it is also pulling the plug on some of the support that kept stocks flying back in 2020.
“This could be a good thing if it beats back inflation without derailing the economic recovery,” Sommer said. “But removing this support also inevitably cools the markets as investors move money around, searching for assets that perform better when interest rates are high.”
Many investors are bewildered by the market’s movement, and concerns about the Fed and rising interest rates have driven some to aggressively sell, the Wall Street Journal reported.
“My fear is we are going to go lower,” said Zhiwei Ren, a portfolio manager at Penn Mutual Asset Management.
Other investors, however, are positioning for a rebound.
“It makes us more emboldened, rather than if the market was making new lows,” Ryan Jacob, chief investment officer at Jacob Asset Management, said of recent trading activity.
This article appeared originally on The Western Journal.