When bad news is good news

The recent rebound in stocks is not too convincing and almost everyone seems to believe that any decent rebound at this point screams a “bearish rally”. So what exactly will it take for the naysayers to go away?

At this point, I would say that traders and investors have fairly well assessed the chances of a recession. Even if central banks close their ears to sticking to higher interest rates, it seems inevitable that we will experience some form of economic slowdown over the next 6-12 months.

The question is how bad are things going to be and will it last more than a few quarters? In other words, a soft landing or a hard landing – especially for the US economy?

As equities continue to brave the storm clouds of persistently high inflation, central bank tightening and recession risks, it’s hard to find solace for a major shift in sentiment. But if a recession is what it takes to end interest rate hikes, this could prove to be a strong tailwind for equities to really turn the ship the other way.

If the pandemic is any lesson, it’s that markets love easy money. And while we won’t see such excessive stimulus from major central banks again, a turnaround in the direction of lower interest rates will certainly be a welcome development for equities. So is this really a recession bad news for actions

Shares

Stocks can be defined as stocks or shares of a company that investors can buy or sell. For example, when you buy a stock, you buy shares, thereby becoming a partial owner of shares in a specific company or fund. Stocks do not pay a fixed rate of interest and are therefore not considered guaranteed income. Therefore, stock markets are often associated with risk. When a company issues bonds, it takes out loans from the buyers. When a company offers stock, on the other hand, it is selling a partial stake in the company. Stocks have become a popular form of investment. Despite their risk, there are many reasons why individuals invest in stocks. Stockholders can also benefit from dividends, as these differ in particular from capital gains or differences in the price of the shares you have purchased. Dividends reflect periodic payments made by a company to its shareholders. They are taxed as long-term capital gains, which vary by country. Why are stocks so popular? In the United States and in many developed countries, equity markets are among the largest in terms of transactions, investors and turnover, which has contributed to their growing popularity over the past decades. The appeal of stocks lies in the potential for high returns. . Most portfolios have some equity exposure for growth, which, as mentioned, also carries a higher degree of risk. So, these people have more stocks in their portfolio because of their potential return over time. However, people who want to retire or rely on a more stable and less risky portfolio often reduce their exposure to equities. This position is not new and may explain the trading habits of many investors. For example, retirement account holders will typically shift at least some of their investments from stocks to bonds or fixed-income securities as they age.

Stocks can be defined as stocks or shares of a company that investors can buy or sell. For example, when you buy a stock, you buy shares, thereby becoming a partial owner of shares in a specific company or fund. Stocks do not pay a fixed rate of interest and are therefore not considered guaranteed income. Therefore, stock markets are often associated with risk. When a company issues bonds, it takes out loans from the buyers. When a company offers stock, on the other hand, it is selling a partial stake in the company. Stocks have become a popular form of investment. Despite their risk, there are many reasons why individuals invest in stocks. Stockholders can also benefit from dividends, as these differ in particular from capital gains or differences in the price of the shares you have purchased. Dividends reflect periodic payments made by a company to its shareholders. They are taxed as long-term capital gains, which vary by country. Why are stocks so popular? In the United States and in many developed countries, equity markets are among the largest in terms of transactions, investors and turnover, which has contributed to their growing popularity over the past decades. The appeal of stocks lies in the potential for high returns. . Most portfolios have some equity exposure for growth, which, as mentioned, also carries a higher degree of risk. So, these people have more stocks in their portfolio because of their potential return over time. However, people who want to retire or rely on a more stable and less risky portfolio often reduce their exposure to equities. This position is not new and may explain the trading habits of many investors. For example, retirement account holders will typically shift at least some of their investments from stocks to bonds or fixed-income securities as they age.
Read this term? It depends, but if we are to have a rather superficial experience – which seems to be the case for the markets right now, I think that’s reason enough for investors to start to regain confidence in risky trading.

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