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Analytics, 20 January 2023

Stocks slide on recession fears

The Stock market has been experiencing an unfriendly environment and slug as inflation hit the roof and put all kinds of investments under strain. This has forced investors to rethink some investments and some have found this to be an uphill task. Experts seem unable to agree with one another given the unpredictability by which the market has been fluctuating.

The head of the European central bank warned that there might be a chance of a darkening market outlook. The geopolitical conflict between Russia and Ukraine has forced food and energy prices to skyrocket.

In this article, we shall look at the effect of recession fears on various countries and their respective stock markets and also look at Dow Jones, S&P 500, and Nasdaq indexes.

Markets Affected By Recession Fears

The British pound fell extremely lower than it has gone in the recent past in comparison to the U.S. dollar. Investors who had taken up British government bonds are abandoning ship in fear of the new tax cut plan the government announced and what it means for the market.

The U.S. stock market slid in harmony with some major assets such as (but not limited to) the U.S. dollar and oil. They weakened after U.S. data was released sparking the fear of the predicted global recession anew. The U.S. stock fell on Thursday causing concern from investors on how the federal reserve increases the rate even though there have been signs of slowing inflation.

In New Zealand the country’s currency and stock market faced losses after Jacinda Ardern, the Prime Minister, announced she would be stepping down soon. This sparked a period of uncertainty that led to these losses in the market. Even in China where there had been hopes of a slow but steady and sure recovery, mostly due to the government’s decision to shelf its zero-covid policy, the downbeat mood has made these hopes impotent as investors tuck tail or look for alternatives.

France, which has been ranked among the biggest economies in Europe, foresees a considerable slowdown in economic growth and development.

S&P 500

The Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. The index has been going down continuously for the past year, having lost by -13.03% in the past year and -1.54% in the last six months. It was trading at 3898.85 US dollars at the time of writing.

Dow Jones

The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The index is currently trading at 33,044.56 U.S. dollars as of the time of writing. The index ended last year at a market cap of 9.67 trillion dollars. In the past year, it has fallen by -4.81% but in half that time it has experienced a rise of 3.67% in the past six months. It has experienced a fall every day for the past three days.


The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange. Along with the Dow Jones Industrial Average and S&P 500, it is one of the three most-followed stock market indices in the United States.

The total shares traded for the NASDAQ were over 4.42 billion. Declining stocks led advancers by a 1.68 to 1 ratio. There were 1772 advancers and 2983 decliners for the day. On the NASDAQ Stock Exchange, 39 stocks reached a 52-week high, and 17 of those reaching lows totaled.

The index has experienced a -8.79% drop in the past six months and a -23.33% drop in the past year. It was trading at 10852.27 US dollars at the time of writing.

Investor’s Note

During the past quarter, analysts have lowered their EPS forecasts by a larger-than-average margin of 6.5% from Sept. 30 to Dec. 31, according to data from FactSet Research.

The dow seems the only index that is not largely disappointing and the only one some see with a comeback ability.

Given the inflation and recession fears, investors with a stake in any unpredictable market are unsure of what to expect. It is best to study your portfolio and make adjustments where necessary, and most importantly keep an eye on the market and stay informed.

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