Investors hoping to purchase inexpensive stocks are facing a challenging outlook due to a selloff that shook global equity Traders markets. The selloff raised concerns about the US economy and the possibility of further losses due to underwhelming tech earnings.
The S&P 500 fell almost 6% from its July peak following a two-day meltdown late last week, and the tech-heavy Nasdaq Composite continued to lose ground, marking its first 10% correction from a record high since early 2022. Asia and Europe saw a sharp decline in stock prices, with Japan’s Nikkei index losing almost 5% of its value in a single week.
As we prepare for another week of trading, the market’s collapse poses a problem. Over the past two years, investors have benefited from buying stocks during times of weakness, as evidenced by the S&P 500’s roughly 50% increase from its October 2022 low.
However, dip buyers risk being crushed if concerns about the recession intensify in the wake of last week’s worrying US data. According to Truist Advisory Services, the S&P 500 has declined by an average of 29% during recessions since World War Two.
Legendary investor Warren Buffett’s Berkshire Hathaway may have given bargain hunters pause with its earnings report on Saturday. The company sold roughly half of its Apple stake and saw its cash on hand surge to $277 billion in the second quarter. Berkshire frequently lets money.
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