Scott Sheppard
January 24, 2022
Tactical Growth Mandate - Weekly Briefing
There’s an old Wall Street adage that says the stock market takes the stairs up and the elevator down. That resonated this past week as the S&P500 had it’s worst week since the start of the pandemic. Most of the selling seems to be hitting the growth-type stocks the hardest as the NASDAQ is now down nearly 12% since the beginning of 2022.
I guess we could point the finger at a multiple causes to create a narrative as to why stocks are falling; Omicron, Russia/Ukraine, Supply-Chain disruptions, etc.. For me, however, I believe that it all began when the U.S. Federal Reserve stated that they would be lessening their easy monetary policy conditions. Since then, stock markets just haven’t been able to rally.
As a prudent speculator in the market, I think one has to be asking have meme-stocks (GameStop, AMC, etc.), high growth stocks, and the stock markets overall been advancing because of good fundamentals or was it because the Central Banks made too many dollars available chasing too few assets? We’ll hear on Wednesday from the US Federal Reserve Chairman. It will be interesting to see how markets react to his comments.
The U.S. is truly experiencing a terrible start to the year. If one pays any attention to the January market barometer which states “as January goes, so goes the rest of year”, 2022 could prove to a hard reminder that being an investor is a difficult job.