I just sent this in response to my friend stating that he believes another dip, like last years, if not worse, is around the corner. What do you guys think?
“We shall see. It would take another 12% drop in SPY to equate to how much it dropped last year, it’s already down 8% this month and seems to be beginning to price in worst case scenarios like boots on the ground and continued oil/energy disruption. Another 12% drop (20% broad market decline in total) would be a very big deal and a very disproportionate drop compared to market declines caused by wars, oil disruption and inflation in the past. The market didn’t even drop that much following 9/11 and the outbreak of the war in Afghanistan, and that was also amidst the dot com bubble crash.
But what do I know. Anything is possible. If the market drops another 12% over this war I’d be clutching my pearls though.”
Any opinions or predictions?
byu/CanadianAbroad7 inStockMarket
Posted by CanadianAbroad7
7 Comments
I think it gets much worse before it gets better. But stay the course and DCA.
I think the reversal of precious metals means that traders are expecting long term negative economic effects from the war. Traders buy gold when inflation is in the cards.
With the Yen carry trade potentially beginning to unwind, record (and seriously unsustainable – and growing) levels of national debt, and the ongoing – and completely avoidable – middle East conflict, what’s to stop it dropping another 12% or more?
I can say with certainty that this administration is not competent enough to fix anything. A depression level correction has been overdue since the can was kicked in 2008 and until now, we’ve had competent leadership to at least postpone the inevitable.
I think we’re cooked. And I don’t think it’s going to correct quickly like it did in 2008 or 2020.
I think the S&P peaked around 7k. My guess is that it will drop to around 6k. So about a 15% decrease. Wouldn’t be shocked if it drops as much as 20%.
Just means a great buying opportunity for a while. Wouldn’t be shocked if it stayed in that range for about a year or so.
With my prediction said, it is very hard to sell right now because with Trump he could send a tweet out and the thing could skyrocket at any time. We saw that with the tarrifs.
I think it is a good time to buy
I’d separate the headline risk from the market risk. Stocks can absorb ugly geopolitics pretty fast, but if oil stays bid, that’s when it starts hitting inflation, margins, and multiples. That’s the part worth watching.
My favorite plays continue to be agriculture stuff. With the fertilizer crunch we should see higher prices sooner rather than later. Especially $CORN, $CANE and $WEAT.