This Friday was the last day of the year for trading on Wall Street and closed with a setback that ended 2022 as the worst year since the financial crisis of 2008.
For three of the main indexes, the winning streak they had enjoyed for three consecutive years came to an end.
The Dow Jones, which was the best performer this year, recorded a drop of approximately 8.8%, followed by the S&P 500, which fell 19.4%, and in third place was the Nasdaq technology index, which fell 33.1%.
Wall Street records worst year since 2008, with S&P 500 finishing 2022 down nearly 20% https://t.co/rTUpi5ipJs pic.twitter.com/LdYdhAnDS3
— CNBC Now (@CNBCnow) December 30, 2022
According to analysts at the Edward Jones consulting firm, 2022 was extremely complicated for investors due to several factors: rising inflation, "aggressive central bank" tightening, China's blockades and the war in Ukraine.
"As a result, most of the major stock indexes peaked on the first trading day of the year and have been on a downward trend ever since," he explained.
Uninspiring forecasts for 2023
As difficult as this year has been, some experts believe that the situation is far from improving. In fact, they estimate that the market will generally remain in a downtrend until a recession hits or there are changes at the Federal Reserve (Fed).
"There has been a slowdown in the world's three key economies. In the euro zone because of gas prices that have risen dramatically; China, which is growing less due to disturbances and volatility in the housing sector, and in the United States, the labor market is still a strong market, but at the same time it is losing momentum because interest rates are starting to take effect." said the International Monetary Fund (IMF).
Wall Street strategists' average 2023 year-end target for the S&P 500 stands at 4,147, calling for a higher year.
However, many are seeing double-digits drawdowns in 2023 amid recession fears.https://t.co/lRIJXkamfO pic.twitter.com/BxceSl4ESs
— Yun Li (@YunLi626) December 22, 2022
However, we will have to wait until next Tuesday when the holidays are over and Wall Street reopens, because by then there will be new indicators to analyze.
In addition, the Fed will release the minutes of its latest meeting on Wednesday, which will help investors determine what their next moves will be.
