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Stock market skids to worst start of the year since 1970, S&P down 21%

Jun 30, 2022

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The stock market notched its worst start to the year in more than 50 years with the S&P 500 closing down 21% over the past six months. The skid marks the poorest first-half performance from the index since 1970.

The S&P 500 ended June 30 at 3,785, more than a thousand points lower than the start of the year and representing a wipeout of more than $8 trillion in market value.

For those hoping this is the bottom, however, some bears have some bad news. Sixty-year Wall Street veteran George Ball told Bloomberg the S&P could bottom at 3,100, while Bank of America wrote in a note that 3,000 could be the worst-case scenario.

History says it’s a coin toss how the markets will perform in the second half. Trackers at S&P Dow Jones Global Indices said since 1957, a negative first-half results in a negative second-half roughly 50% of the time.

Back in 1970, after dropping 21%, the S&P 500 recovered its first-half losses in the second half, rising 27%.

This year, some experts are optimistic, saying the market has already priced in the risk of a mild recession. The performance, then, rests on what happens with 4-decade high inflation and how aggressive the Federal Reserve is in its response. Some are worried if high inflation persists, the Fed will be willing to push the economy into a recession to lower it.

SIMONE DEL ROSARIO: IT’S THE STOCK MARKET’S WORST START IN MORE THAN 50 YEARS.

WITH THE S&P 500 – SHEDDING 21% OVER THE PAST SIX MONTHS – THE POOREST PERFORMANCE SINCE 1970.

THE MARKET INDEX – ENDING JUNE 30 AT 3,785. MORE THAN A THOUSAND POINTS LOWER THAN THE START OF THE YEAR.

THAT REPRESENTS A WIPEOUT OF MORE THAN $8 TRILLION IN MARKET VALUE.

IF YOU’RE HOPING THIS IS BOTTOM, SOME BEARS HAVE BAD NEWS.

60-YEAR WALL STREET VET GEORGE BALL TELLS BLOOMBERG THE S&P COULD BOTTOM AT 3,100.

AND BANK OF AMERICA – HAS 3-THOUSAND EARMARKED IN A WORST-CASE SCENARIO.

HISTORY SAYS – IT’S A COIN TOSS HOW THE MARKETS WILL PERFORM THE SECOND HALF. TRACKERS SAY SINCE 1957, A NEGATIVE FIRST HALF RESULTS IN A NEGATIVE SECOND HALF – HALF THE TIME.

BACK IN 1970, THE S&P REBOUNDED, RECOVERING THE LOSSES FROM THE START OF THE YEAR.

THIS YEAR – EXPERTS SAY THE MARKET’S ALREADY PRICED IN THE RISK OF A MILD RECESSION. BUT ALL EYES ARE ON 4-DECADE HIGH INFLATION – AND HOW AGGRESSIVE THE FED IS IN TAMING IT.

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.


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