Is A Market Crash Inevitable?

What goes up…

Since the COVID-influenced bottom in March 2020, stock market investors have been treated to a period of steady gains. It’s actually picking up pace, with the S&P 500 gaining 27% throughout 2021, well over double its average annual total return of 11%, a figure stretching back to 1980.

What Could Cause The Next Crash?

History tells us that the market is a cyclical beast. Volatility, crashes, and corrections are a normal part of investing. Let’s check where the next crash might come from.

#1 Scariants

The social media coined term for fearmongering over new variants is “scariants”. Whilst the Omicron variant was discovered to be largely non deadly, media induced fear still caused closures, lockdowns and economic damage.

#2 Shaky Midterm elections

The US public will engage in Midterm elections on 8 November. With the Democrats only holding a very narrow majority in the House and Senate, even a slight swing toward the Republicans could cause problems for Joe Biden achieving his agenda. It would also likely take any increase to corporate tax off the table.

#3 A crypto wipeout

Over the last few years, investors have poured cash into the crypto market. Bitcoin has risen 8,000,000,000% in 11 years. Think of that!

#4 Inevitability

What goes up always comes down. It’s inevitable. Gravity affects the markets in the same way.

What do you think?

Is a crash on the cards? Or is this all pessimistic, hot air, hullabaloo? Let us know what you think by tweeting us at @_contentworks.

Coming Up Week 21.02.22

Monday

No major events are scheduled.

Tuesday

● USD — Markit Manufacturing PMI Flash (FEB); CB Consumer Confidence (FEB)

Wednesday

● NZD — RBNZ Press Conference

Thursday

● USD — GDP Growth Rate QoQ 2nd Est (Q4)

Friday

● USD — ​​Core PCE Price Index YoY (JAN); Durable Goods Orders MoM (JAN); PCE Price Index YoY (JAN); Michigan Consumer Sentiment Final (FEB)

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Contentworks Agency

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