[theold]

The U.S. stock market rebounded somewhat on Wednesday after Tuesday's sharp slide -- which was the strongest one-day slide since 2020.

But the stock market rose only weakly and did not recover more than a fraction of the great decline. The broad index S&P 500 rose 0.3 percent, the Dow Jones industrial average rose 0.1 percent, and the Nasdaq technology-heavy composite index, which fell the most on Tuesday, rose 0.8 percent.


https://www.aftonbladet.se/nyheter/a/Rr7...try=954825

[sgbuffett]

I don't think its time for US market but i would argue yhe plunge means nothing because it simply erase the sharp rise before the plunge.

The market is back to where it is 1+week ago.

All this means nothing and nothing changed at all.


1. US is facing high inflation.
2. US economy remains strong.
3. Rate hikes after the next one takes fed funds rate to 3.25%. At this level if economy remains strong tye current stock prices are high but can be justified. The earnings yield is 5+% and some growth ..vs 3.25 fed rate.

4. Problem is if Fed goes through with next 2 rate hikes after the next one. It takes the interest rate to 4.5% and market can come down 20% to maintain a reasonable valuation.

5. It is possible that inflation is already under control. This I not so far fetched given commodity prices have fallen things like rent is starting to come down.

The way j see it best to stay away. If things go well you make make 7% but if inflation persists fed has to raise rate until you get a recession....a 20% loss can happen easily.