January marked a change of pace for the stock market. After a 2021 defined by rapid growth, investors are increasingly concerned. Entering the new year, a number of sectors saw meaningful corrections. Tech, crypto, electric vehicles, and more all saw drastic declines as Wall Street began questioning the sustainability of last year’s bull run. So as the year progresses, investors have one question. Is the stock market crashing?
According to many experts, the answer is no. Many feel the market is still sound, viewing recent declines as an opportunity to buy the dip in long-term growth stocks.
Despite this confidence, though, many on Wall Street feel the pressure. Ahead of impending interest rate hikes and other tapering measures, uncertainty is in the air. Right now, March 2022 appears to represent an inflection point, when the Federal Reserve may hike rates.
If you’re looking for more information, you’re in luck. Here is what three bulls and bears say about the potential for a stock market crash.
Is the Stock Market Crashing?
Even amidst a brutal January, Luca Paolini, chief strategist at Pictet Asset Management, remains bullish. “The Omicron Covid variant may have led to more restrictions but the economic recovery remains resilient nevertheless, which means stocks don’t appear particularly vulnerable to a correction,” Paolini said. Investors should note that Paolini expects inflation to ease in the second half of 2022.
James Solloway, chief market strategist at SEI’s Investment Management Unit, feels similarly confident. “Although there have been pockets of speculative behavior in some areas of the financial world — meme stocks, SPACs, cryptocurrencies and NFTs, for example — we do not see the sort of speculative fervor that would point to a serious equity correction in 2022,” Solloway said.
On the bearish side, some believe recent mania has resulted in a bubble that’s ready to burst. Michael Burry, one of the earliest predictors of the 2008 crash, is strongly bearish. In June 2021, the Big Short star described the state of the economy as the “greatest speculative bubble of all time in all things,” citing Dogecoin (DOGE-USD), Robinhood (NASDAQ:HOOD) and the U.S. housing market.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
