The worst may not be over for the market. Stocks fall again | CNN Business


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CNN Business

The stock market crash of 2022 may not be over yet. Stocks fell again Thursday, following Massive Wednesday sale.

the Dow ended the day down more than 235 points, or 0.8%, recovering only slightly from a decline of nearly 475 points earlier in the session. Blue chips are down 14% this year and hit a new 52-week low on Thursday morning.

the S&P500which is dangerously close to dropping 20% ​​from the absolute record reached on January 3 and in a bear market, fell 0.6%. The tech-heavy Nasdaq, which is already in bearish territory, fell 0.3%. The Nasdaq has plunged 27% this year alone.

Top tech stocks were among the biggest market losers on Thursday after the Dow component Cisco

(CSCO)
announced sales that missed forecasts and also gave a weak outlook. Cisco

(CSCO)
fell 14% on the news.

Walmart Retail Leaders

(WMT)
and target

(TGT)
who have dragged down Wall Street this week because of disappointing outlookwas hit again on Thursday, and the news continues to be bad for others retail inventory.

But Kohl

(KSS)
shares rose nearly 4% on Thursday in volatile trading even as the chain in trouble reported a huge shortfall and cut its forecast.

The poor results of business leaders also sound the alarm of the recession. More and more pundits are starting to predict a downturn later this year or early 2023. The unease on Wall Street is palpable.

“What is the catalyst? What will encourage investors to buy more and give them confidence in the market? I don’t think there’s anything right now,” said JJ Kinahan, chief market strategist at tastytrade.

The VIX

(VIX)
, a measure of Wall Street volatility, has soared more than 70% this year. And the CNN Corporate Fear and Greed Indexwho watches the VIX

(VIX)
and six other measures of market sentiment, shows signs of extreme fear.

“Investors need to keep their seatbelts fastened. This period of volatility is unlikely to be over,” said Tom Galvin, chief investment officer at City National Rochdale.

“There’s a long list of uncertainties,” Galvin added, citing the Federal Reserve’s rate and inflation policy, concerns about new Covid outbreaks in China and the US invasion of Ukraine. Russia as lingering concerns.

Galvin said investors would do well to avoid speculative tech stocks and European equities due to concerns about excessive valuations and a potential economic slowdown. Instead, he recommends quality blue chip stocks that pay regular dividends.

Investors may also be increasingly concerned about how market turmoil is hurting large hedge funds and other institutional investment firms.

A leading hedge fund, Melvin Capital, announced plans to close after betting against soaring meme stocks like GameStop

(GEM)
in 2021 and making some bad purchases of travel stocks this year.

Traders bailed out risky-momentum tech stocks, bitcoin and other cryptocurrencies and other investments that could benefit from an economic rebound.

“There’s definitely more fear and nervousness out there,” said Dan Pipitone, CEO and co-founder of TradeZero. “The crypto crash also has an impact. There is a wait-and-see approach. People are sitting apart waiting for a clear direction on where we are going.

Instead, investors are now flocking to stocks that are seen as better inflation hedges and, in some cases, beneficiaries of it. rising interest rates.

Case in point? Oil stocks are the market’s big winners This year. Chevron

(CLC)
up more than 40%, is Dow’s top stock, and it’s one of the four largest holdings in Warren Buffett’s Berkshire Hathaway.

(BRKB)
Which one is beat the market wisely This year.

Berkshire is also a great investor at Occidental Petroleum

(OXY)
which has more than doubled this year and is the best performer in the S&P 500.

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