Stock Market Bottom – Are We in?

  • Australian markets still trend lower this year.
  • The question remains, when will we bottom?
  • Economists trust more downtrends are impending.

Today’s sessions had the Australian markets extending their decline, with the material sector exploring the red in the afternoon. The benchmark ASX/S&P 200 Index lost 72 basis points on the day to 6,507, while the high flyer ASX/S&P 200 Energy Index remained flat.

This week’s Australian inflation indicated the CPI (Consumer Price Index) surged 6.8% in July-August. That comes as Brent Crude oil plummets 8% month to date.

Where are We?

Let us travel back a bit. TradingView chart shows all ASX sectors, excluding utilities, presented overall uptrends since the COVID-19 onset in March 2020. Meanwhile, today’s trade places us beneath pre-pandemic peaks.

Meanwhile, the latest actions erased all stock market gains from the speculative craze within the last thirty months. Fast forward, everything appears different today.

August 2021 saw the market peaking and has dipped into chaos since. As the chart shows, ASX 200 has a long journey before exploring its former highs.

The energy sector is the only one in the green year to date, with the former ASX darling technology enduring significant losses from previous highs.

Into Trouble

It is not usual to use such negative tones when talking about the stock markets. Nevertheless, Stanley Druckenmiller maintained such a stance recently during this week’s CNBC Alpha summit.

The fund manager with a faultless track record stated that his company experienced a massive downturn, welcoming a hard landing in the coming year.

He assured that the primary case remains a hard landing by FY23-end, confirming a highly possible recession by 2023-end.

The speculative craze has contributed to the wild movements in the financial share markets within the previous two years, welcoming a bubble in monetary assets, according to Druckenmiller.

However, things are changing. Druckenmiller added that the factors that trigger a bull market are reversing, translating to deep trouble.

Carlyle Group co-founder David Rubenstein remained more upbeat during the summit. He advised investors to avoid buying stock market weakness. Also, Rubenstein urged investors to stop finding a market bottom.

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