Stocks Rally Off Lows – What’s Next

Stocks may have hit rock bottom.

Last Tuesday marked the lowest levels for the stock market since June 2021.

Yet U.S. stocks came roaring back late last week. The S&P 500 (NYSE: SPY) is up 7% and the Nasdaq Composite (NASDAQ: QQQ) added 10% off the lows.

Go here for my #1 trade of 2022 – it’s NOT the big tech stocks.

Why are stocks rallying in the last week?

There really are two primary reasons for the recent gains…

First, peace talks between Russia and the Ukraine appear to be advancing.

Uncertainty over this horrible war has been weighing on stocks since February.

Multiple news reports indicate that there may be progress with peace talks. Ukraine President Zelenskyy says that the talks are beginning to sound “more realistic.”

Turkey’s foreign minister is working to broker a peace deal between the two countries. He reports that the two sides are “close to an agreement.”

It’s impossible to know what’s happening with these negotiations. However, the markets have been rallying on the prospect of the war ending peacefully.

Second, the Federal Reserve raised interest rates by 0.25%.

Federal Reserve Chairman Jerome Powell has spent the last couple months preparing the market for an interest rate hike. And last Wednesday he announced the first quarter-point increase in 3-years.

Powell also says we should expect 6 additional interest rate increases in 2022.

Plus, the Fed plans to begin reducing the size of its balance sheet. The Fed currently has $9 trillion in assets – primarily U.S. Treasuries and mortgage-backed securities.

The Federal Reserve now expects inflation to exceed 4% in 2022. And GDP growth is expected to slow down throughout the year.

Rising interest rates aren’t great for the stock market. That’s why possibility of higher interest rates sent stocks falling in January and February.

The good news is that the stock market now has greater certainty around the Fed’s plans. Investors know that interest rates will increase throughout 2022 and 2023.

Financial markets HATE uncertainty.

Right now, there’s been a lot of uncertainty in the world.

This includes the war between Russia and Ukraine. Sky high inflation. Soaring prices for oil, gas and food. And the Fed’s plans for raising interest rates.

However, the prospect for peace and clear direction from the Fed is positive in the near-term. And the stock market reacted accordingly.

The removal of some uncertainty is giving a near-term boost to stock prices.

Remember that markets form a bottom over time. Increased volatility will likely remain for some time. And you can expect to see stocks re-test the lows from last week before definitively heading higher.

The recent market selloff also presents a huge buying opportunity. One that we haven’t seen since March 2020.

That’s why I’m focused on uncovering the next generation tech stock winners.  And buying these stocks could be like jumping into Apple, Google, or Netflix 10+ years ago.

They’re called MACE stocks.

Access my urgent LIVE webinar to discover:

  • What exactly are MACE stocks – and why you have not heard of them
  • When these MACE stocks could become household names
  • Details on 5 of these next generation tech stocks
  • How these stocks could crush FANG stocks in the next 3 years
  • Why I’m planning to bet $100,000 of my personal savings on these stocks

Simply go here for urgent details.

Yours in Wealth,

Ian Wyatt

To top