We’re about to enter the US’s quarterly earnings reporting season. Not for decades has Wall Street’s three monthly ritual been quite so important. The US stock market has just experienced its worst first half of any year since 1970. What happens next depends on what emerges from the companies themselves over the next few weeks.
Markets usually bounce back strongly after a sell-off like we’ve seen in 2022. But that’s not a cheque anyone’s writing just yet. For one thing, the meltdown came off a high base. For another, at their current level, stocks only offer value if earnings remain elevated. Were profits to disappoint, another sharp decline is likely.
What to do? In our interview yesterday, Corion Capital’s David Bacher said after some time being underweight US stocks and techs in particular, his firm is buying again, moving back to neutral. He reckons after the sell-off, the risk of being out the market is now higher than being in it. Because over time, equities rise in value. Makes sense to me.
More for you to read today:
- Wild First Half in Markets Sets Stage for More Big Moves in Rest of 2022. Charts size up what might lie ahead for businesses and the economy.
- Lessons of Russia’s War in Ukraine: You Can’t Hide and Weapons Stockpiles Are Essential. US, its allies study Europe’s biggest conflict in decades; ‘You can’t cyber your way across a river’.
- Where Does the Market Go From Here? Seven Wall Street Strategists Weigh In. After the worst first-half stock-market decline in half a century, The Wall Street Journal asked leading investors and strategists to share their outlooks for the second half of 2022. Here’s what they said.
- Confounding Nick Kyrgios Keeps Himself on Task at Wimbledon. The temperamental Australian reached his first major quarterfinal in seven years on Monday after defeating American Brandon Nakashima in five sets.
START YOUR MORNING BY LISTENING TO TODAY’S BIZNEWS BREAKFAST BRIEFING – Strong JSE, improved Bitcoin; Don’t hold your breath for eTolls decision; highlights of RW Johnson interview.
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