Has the sharemarket selloff of 2022 hit a bottom? Some market bulls think so

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Trying to predict the future of markets is a hazardous pastime - trying to call the bottom is a kamikaze move. Has the sharemarket rout of 2022 hit a bottom? Some market bulls think so. By Elizabeth Knight asx

All of a sudden, there’s a sense of balance emerging in sharemarkets. Against the negative and fearful alarm prevailing over the past six months that the rout in equities will continue, some leading market experts are now predicting that the worst is over.

The nascent optimism in sections of the market doesn’t mean there won’t be more pain ahead for investors. But it is important to note that traditionally equities markets are a lead indicator or a predictor of what is in store six or nine months later.Plenty of experts are cautious about the outlook for sharemarkets in the second half of this calendar year, and they may yet be proved right.

Yet lower absolute earnings won’t necessarily drive a negative reaction. This is because investors have already factored in lower earnings per share outcomes for many businesses. The bull market school of thought doesn’t necessarily take the view that inflation has peaked - some think it has while others feel that it is close to peaking.

 

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