From the Wall Street Journal’s “Stock Futures Slip, Putting Wall Street on Course to Extend Declines” posted early Monday:
U.S. stock futures edged down, suggesting major indexes will extend the selloff that has pushed the S&P 500 down for six consecutive weeks…
The S&P 500 suffered its worst weekly losing streak since June 2011, even after posting gains on Friday, and is flirting with bear market territory, a level 20% lower than a recent high.
Investors, worried that the Federal Reserve has been too late to spot the risks from soaring inflation, fear the central bank will move too aggressively to fight it, a mistake that could tip the economy into a recession.
The resulting selloff, which has been compounded by the war in Ukraine and Covid-19 lockdowns in China, has been broad, affecting most assets from cryptocurrencies and stocks to government bonds, leaving investors unsure of where to seek safety.
After weeks of losses, some investors are holding on to stocks, or buying more, hoping declines are reaching their nadir. Others are settling in for a protracted period of volatility.
“We are moving into a more challenging time for markets. We need to see signs that inflation is not just peaking but actually decelerating before you find a sustainable bottom in the market. That is going to take at least a couple of months,” said David Donabedian, chief investment officer at CIBC Private Wealth.
“That doesn’t mean we won’t have counter-rallies higher from day to day, but I think this is a long drawn-out process and it is largely data-driven,” he said.
Charts: Yahoo!Finance sees a bearish diamond top pattern. Max pain is at $160 (up from Friday’s $152.50) with a call mountain at $170 (up from $160) and a put peak at $160 (up from $145).