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"Brace For Stock Market Crash That Will Freak Americans Out"
by Epic Economist
"The 2022 stock market crash is much worse than anyone realizes. Some call it a slow train wreck - which is not untrue, - but at the end of the day, there’s no stopping this disaster. A dramatic sell-off continues to pick up speed, sending indexes to bear market territory while bubbly stocks face a free-fall that only rivals the downturn witnessed during the dot-com bust. Investors are panicking as inflation continues to soar despite the Fed’s attempts to control it. This means that even higher interest rates are coming, and they will probably be announced at tomorrow’s FOMC meeting. This also means that even sharper losses are ahead, and in today’s video, we compiled some dire outlooks shared by Wall Street’s greatest minds.
Stock markets faced a broad-based sell-off this morning after a very disappointing May Consumer Price Index report was released on Friday, which showed that instead of getting better, inflation is still getting worse in the U.S. As of midday today, the S&P 500 was down 3.76%, the Dow Jones Industrial Average was down approximately 2.5%, while the tech-heavy Nasdaq Composite plunged 4.19%.
The losses recorded since Friday reflect the depth of market disappointment with the CPI inflation data. In essence, this is a signal that the Federal Reserve will have to tighten policy even more aggressively to be able to contain inflation growth – which is very bad news for an overvalued stock market. At the same time, Bank of America’s Chief Investment Strategist Michael Hartnett released a recent note to clients warning that the ongoing stock market crash is far worse than anyone realizes. In fact, BofA's Bull & Bear Indicator is at "extreme bearish" territory right now, and just shy off all-time lows.
Hartnett explains that a significant reversal in investors’ sentiment is taking place right now given that the inflation shock has become an undeniable reality. In the first quarter alone, natural gas prices shot up by 141%, gasoline prices rose 91%, oil went up by 61%, while wheat and corn surged by 39% and 30%, respectively. In his view, the rates shock triggered by the Fed is just beginning, and a massive slowdown in economic growth is also going to contribute to a stock market meltdown.
On a similar note, Salem Abraham, a 34-year market veteran says that a Great Depression-style stock-market crash and economic meltdown can't be ruled out for 2022, and a striking double-digit loss could wipe out a quarter of the market’s gains in a single day."I see this [downfall], and I'm just like, 'This is really nothing,'" Abraham said in an interview with Insider. "There's a way worse scenario than this. People have both a short memory and a lack of respect for history," he said.“We may just be setting up for a 25% drop in one day," Abraham predicts.
If that apocalyptic scenario plays out, it's not just rich investors who will get crushed. Worker pensions and college endowments would be wiped out if they're too heavily reliant on stocks, he alerted. Simply put, we may be on the verge of an economic catastrophe unlike anything we’ve ever experienced. Sooner than later the "house of cards" is coming down. The panic and the pain ahead won't end anytime soon, and they are going to be far greater than most Americans will be able to handle."
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