Today have signs of Panic selling ...
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Today have signs of Panic selling ...
I think we could very easily go under 10,000. We're very close, 18% down from the peak in early 2021, from the NZX50 going into official Bear market territory, (down 20%). There seems no obvious silver bullet to break it out of its downward trend, in fact quite the opposite. It would seem the RBNZ are taking the gloves off with interest rates and will do anything and everything it takes to quell inflation even if it means sending the economy into a very deep and protracted recession. On top of that we have all the obvious headwinds from the war, deterioration in China our biggest trading partner, central banks around the world also raising interest rates, no obvious end to supply chain issues and hugely elevated freight costs..to name just a few of the headwinds that appear unlikely to materially abate anytime soon.
Name of the game is capital preservation in 2022. He who loses the least is the Winner !
A technicality perhaps but if we're talking bear markets being a 20% decline, it should be measured on the NZ Capital index otherwise reinvested dividends distort the picture as well as the comparability to other global indexs.
For those attempting technical analysis of a compounded divided return index... I don't know.
Revenues are absolutely exploding, US nominal GDP is through the roof.
American mid and small caps are as cheap as they've ever been in 30 years.
Sentiment is about as negative as it ever gets outside actual severe bear markets
Remember when the dunce Orr did a 50 point emergency cut in 2019 before anyone had heard of Covid AND instructed banks to prepare for negative rates...
The NZX-50 will more or less follow the s&p 500 index.
I didn't see RBNZ as being that "hawkish", Orr just said they would control inflation. Retail rates didn't move much when the announcement was made indicating it was broadly in line with their expectations. They didn't say they where going to increase the rate they where increasing at or flood the bond market selling off assets.
S&P500 is doing OK this year. There have been modest declines but not panic yet. It's a fighting retreat and not a rout.