Where is the Market Bottom?
Bears are very comfortable at this level, more pain to come into the summer.
Market Return YTD
S&P 500 - 19%
NASDAQ - 31%
Dow Jones - 15%
Market sell off has intensify last week. Now Market has lost almost $11 Trillion in value since the 2022. We haven’t seen straight 7 weeks of red market in last 20 years.
Now Big Technology stocks like AAPL , MSFT & TSLA falling harder than others as expected.
There is No Alternative Investments Options other than Stock Market.
NO HELP from the FED
Fed has decided to go aggressive to raise the Interest rate by 0.50 bp each meeting until end of the year to reduce the Inflation. They have clearly mentioned last week that they really don’t care if Market falls further
Inflation
No sign of slow down in the Inflation rate. April 2022 still showing higher inflation,
Housing Market Slowing down
MBA Mortgage Applications -11%, vs +2.0%
Purchases -11.9%, vs +4.5%
Refis -9.5%, vs -2.0%
Diesel Prices hit $5.557 avg last week.
Retailers are showing warning sign of a slowing down of an economy.
Rising expenses and Inflation are hurting retail companies.
One might expect companies growing same-store sales during a period of high inflation to book higher profits, but that is not what has been happening for the two retail giants:
Shares of Target plunged 25% on May 18 after the retailer reported a 48% decline in earnings per share for its fiscal first quarter ended April 30 from the year-earlier quarter, despite a 3.4% increase in comparable-store sales. The company cited increasing costs, including wages, transportation and storage of inventory. That last item stood out: Product inventories as of April 30 were up 43% from a year earlier. Target CEO Brian Cornell said customer spending shifted away from “hardlines,” which include furniture, appliances and electronics.
How Much lower we can go?
As per current Market structure, we are heading much lower prices in coming weeks. One of the prediction expecting 10-15% more to the down side.
Expected Lower Targets for Big Cap Tech companies
AAPL 120 MSFT 220 TSLA 550 AMZN 1700 GOOGL 1800
Is this good time to Invest for Long term?
No one knows where is the Bottom, If you are planning to Invest in very good companies, this is the good time to start DCA (Dollar Cost Average).
For example if you are planning to Invest 100K in the Market, Start buying good companies with 15-20% of you capital each month for next 4 months.
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