moonradiance
2022-05-11

$Li Auto(LI)$Signs of Recession approaching!

Stock markets as well as cryptocurrencies are down drastically, inflation up all time high since early 1980s at 8.5% in Mar 2022 while next CPI to be announced tomorrow looking grim. Currencies are volatile.

The FTSE all world barometer that represent equities all around the world falls 3% which is substantial and largest since Jun 2020.

Are these signs of a great recession or just a slow down? What's behind the scene actually?

The overall economy uncertainty, the war in Ukraine and flare up of next COVID-19 variant, all these unknown variables pushes investors to be caution or move away from such assets. On other hand when the FED increase 50 basis point interest rate it causes the dollar to be stronger, the higher yields attract investment capital from investors abroad seeking higher returns on bonds and interest-rate products. In short when dollar is strong, your local currencies will fall.

In just the last 4 months Asian markets lost 2 trillion dollars includes china Japan India and SEA nations.

Unfortunately, when most nations open up from COVID-19 lockdown. China remain closed and this affect much of the trade and tourism broadly all around the world and especially Asian where china is the main economy drive. This closure leads to material shortage and more expensive parts and finally the end products. The whole of china economy essentially comes to a halt which has wide spread implication. China export hit 2 year low.

There is also rising cause of debt which affects developing many countries and many may face default just like Sri Lanka. With rising interest rates, this will further implicate global economy from recovering and contribute to higher inflation. These developing countries can only borrow to repay debt leading too eventual collapse.

The Ukraine war also causes much uncertainty and to how far Russia will take this to and with it's nuclear threats.

The real estate is also feeling the heat of slow downand usually has a direct relation to how the stock market performs.

All these factors and uncertainties overrides all the earnings, positive upsides and forecast for most individual companies.

As long as these factors and uncertainties persist, we will not see any positive upswing in the market and may very well have to be prepared for a recession in the coming months or year. 

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • HilaryWilde
    2022-05-12
    HilaryWilde
    Do you see any investment opportunities in the current situation?
    • moonradianceReplymoonradiance
      but also be cautious that there maybe a handful of tech companies might go into the red and not make it thru if the recession is prolonged. it's something that maybe dangerously overlooked?
    • moonradiance
      it varies depending on who you ask. if you have long holding power you can actually buy now for very long term growth. otherwise you can look into recession proved sectors of the industry.
  • Tracccy
    2022-05-11
    Tracccy
    Hope many countries will not have extreme situations like Sri Lanka.
    • moonradiance
      united nations have identified 69 such developing countries
  • BurnellStella
    2022-05-12
    BurnellStella
    I'm not optimistic about the future of the stock market.
  • MortimerDodd
    2022-05-12
    MortimerDodd
    The Fed is in a quandary.
  • MinkyHuat
    2022-05-12
    MinkyHuat
    Good insights
  • 随便买卖的马自达方向盘
    2022-05-11
    随便买卖的马自达方向盘
    deep insight
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