Commodity prices have tumbled in the past month, with oil and copper down 17% and 33%, respectively.
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It never feels good when the stock market turns big gains into losses, as it did on Monday, and it feels even worse when the losses are triggered by bad news from
Apple
.
And yet investors shouldn’t lose hope that the market has bottomed out.
It has been a tough year, with the
S&P 500
down about 20% from its all-time high in early January.
There was a case for some optimism on Friday, with all three major indexes gaining more than 1% as investors dialed back their expectations for a full-point rate increase by the Federal Reserve to fight rapid inflation. The indexes continued to rally on Monday until Apple (ticker: AAPL) announced it would slow down hiring and spending growth next year as economic demand wanes.
The news wiped out all of the earlier gains for the day, with the S&P 500 down 0.8%. The
Dow Jones Industrial Average
fell 0.7%, and the
Nasdaq Composite
0.8%.
Now, the debate is about whether the market has hit bottom, or if there will be another wave of selling that will bring fresh lows.
The bull—or optimistic—case starts with the narrative that inflation may have peaked.
The consumer price index rose 9% year-over-year in June, even after having gained over 8% in May. But commodity prices have tumbled in the past month, with oil and copper down…
..
