I would say probably toward the start to middle of next year.”įor the rest of this year, though, “we’re going to see a lot of churning,” McMillan says. “Once the economy adjusts to the higher rates, we’re going to be starting to move up again. “At this point, I think it’s going to be a shallow pullback, maybe another 10% from where we are right now,” says McMillan. How big the effect could be will depend on the depth of the recession, says McMillan. If the Fed’s aggressive rate hikes push the economy into a recession, companies’ earnings will be affected, which will in turn affect their stock prices. Expert Stock Market Predictions for the Second Half of 2022 ‘We’re Going to See a Lot of Churning’ There’s been a lot of volatility so we asked six experts what they thought about what may happen for the back half of 2022, and how to prepare for the worst. mutual fund or ETF is down 17.3% since the beginning of the year, and the market saw several instances of daily and weekly losses at their highest level since the pandemic.īetween recession fears, high inflation, and high interest rates making things harder for businesses and individuals alike, investors are reasonably concerned about how much worse it could get in the coming months. That’s a bleak prediction in what’s already been a tough year for the stock market. “I think we probably are going to be facing a recession because the Fed has explicitly said that’s what it needs,” says Brad McMillan, CIO for Commonwealth Financial Network.
With the August Consumer Price Index (CPI) numbers showing inflation remaining stubbornly high, the Fed has made it clear it intends to make reducing inflation its top priority, even if it comes at a cost of a higher unemployment rate. The Fed announced a 0.75% rate hike Thursday, the fifth rate increase this year and the third consecutive 0.75% jump. If the Fed’s latest announcement - and the ensuing turbulence in the market - is any indication, things are likely to get hairier before they get better. The S&P 500 closed at its lowest level in 2022 on Monday, and the Dow Jones Industrial Average officially entered a bear market. For more information, see How We Make Money.
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