Prediction for US stock market for 2022

Prior to FOMC announcement, I had predicted that there will be a relief rally as long as the raise is as per expectation, which happened.

Let's do some crystal ball gazing until end of 2022.

The image appears to be less foggy now and the pieces have been falling into place.

In terms of macro economics, barring a major escalation of Ukraine war which involves the entire NATO or world wide escalation of pandemic which leads to world wide lock down, the markets will likely only go up or at worst sideways from now for us markets.

Why so?

The biggest elephant in the room is US mid-term election which is coming in 8 Nov 2022.

It is extremely unlikely that Biden and Democratic Party will take any action that will jeopardise their elections.

A recession or market crash before mid-terms will open them up for republicans to stage a strong counter attack during elections. 

In view of that, even if inflation is raising, interest rates increase can only be dovish. 

Unless raising inflation is so severe that a recession is fast approaching, I will not be expecting any change to the interest rate increase. (It will still be possible if the supply chainworsens, eg. China full lock down for longer than expected or food shortage) 

As long as interest rate increase and quantitative Tightening follows the plan, the stock market won't be dropping, nor will it be allowed to drop.

However, once mid terms elections is over after 8 Nov. Be prepared for bear party. 

Says who? 

https://sg.news.yahoo.com/lee-hsien-loong-challenges-recession-hit-next-2-years-053735579.html

It's such a coincidence that Sg PM is forecasting recession within next 2 years. [Thinking] 

Oh, let's add 1 more party to the mix.

https://asia.nikkei.com/Politics/China-to-hold-party-congress-in-November-report

It so happens that the world's second biggest economy also have vested interest to ensure that markets doesn't fall before November 2022.

[Cool] [Cool] [Cool] 

In summary, based on the leaders of both USA and China having vested interest in a "stable" economy And a "happy" stock marketsas a reflection of their performance, it is unlikely for markets to fall before Nov 2022.

After that, this guy have something to say:

Let's see how accurate is this prediction.

[Cool] [Cool] [Cool]