I don’t know about you, but I have had about enough of the current state of markets.
The constant selling pressure of the last few years has already crashed the price of many stocks, but still the selling pressure remains.
Until interest rates turn the corner, we can expect to see more bloodletting.
Fundamental values go out the window when the market is in the grip of a period like this. I haven’t seen it this bad in many years, if ever.
Projects that are still trying to source financing are being hit for six. It doesn’t matter how much money they are expected to make if their project never gets up and running.
The market is becoming sceptical that they can get financing at all and even if they could, the rate would be so high the project may not be feasible.
I can understand if looking through what is a monetary phenomenon and focusing on long-term opportunities is getting extremely hard to do.
Traders and investors are trapped in bad positions and each day another group of investors hits the sell button to end the pain.
This is a clear illustration of why so few people buy stocks near the low…because at the low, it feels like the world is going to end.
My one piece of comfort to give you is that at this point, there’s only one thing you need to be paying close attention to…
All eyes should be on the US yield curve.
The tide will turn once the market is convinced that rates have reached the peak of this cycle and will start coming down.
The U-turn in stock prices could be incredibly sharp when that happens, and you don’t want to miss the boat because you are still nursing your wounds from the bear market.
While I am also feeling the weight of the past few years…having survived many bear markets and prospered on the other side, I am watching and waiting.
In today’s Closing Bell video I have a look at the S&P 500, gold, and ASX 200 to give you a snapshot of where markets are sitting.
Regards,
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Murray Dawes,
Editor, Money Weekend
