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The U.S. stock market will fluctuate violently in 2022: top analysts lose face, Tesla falls out of favor

The U.S. stock market will fluctuate violently in 2022: top analysts lose face, Tesla falls out of favor

Christmas decorations inside the Wall Street Stock Exchange in New York
Christmas decorations inside the Wall Street Stock Exchange in New York

In 2022, the U.S. stock market will experience severe volatility, which exceeds the expectations of most analysts. The forecast’s margin of error is the largest it has been in 15 years. Market darling Tesla also suffered a major downturn that most analysts hadn’t expected.

The S&P 500 is down nearly 20 percent this year, missing analysts’ forecasts by about 40 percent. This percentage is the largest since 2008. In 2008, the financial crisis caused by the subprime mortgage crisis occurred in the United States, which caused analysts’ prediction errors to be as high as 92%.

The Dow Jones Industrial Average is down 10% this year, from roughly 37,000 at the start of the year to 33,000 now, and the Nasdaq Composite is down 33%, from more than 15,300 at the start of the year to 10,735 now.

The U.S. financial media Market Watch (MarketWatch) reported that a year ago, analysts predicted that the S & P 500 index would reach 5,264 in 2022, but in fact, the index fell from the previous record high of 4,700 to The current 3800 points can be said to be very different.

This year, the Fed has entered a rate-hike cycle amid surging inflation, forcing top Wall Street strategists to proceed cautiously, repeatedly lowering their forecasts for year-end stock market growth targets.

MarketWatch’s recent survey of top Wall Street forecasters shows they see the S&P 500 rising modestly to 4,031 in 2023, up just six percentage points from today.

In the sluggish market atmosphere in 2022, the most eye-catching thing should be that Musk’s electric car Tesla has fallen from the market darling to a low price that shareholders have never dared to imagine. It has fallen to the current $138 a share, a drop of as much as 60%, nearly twice the Nasdaq Technology Index, and three times the S&P 500.

Tesla’s market value also fell from more than $1 trillion to $440 billion. Even the crown of the world’s richest man on Musk’s head has fallen.

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There are many reasons why Tesla has fallen out of favor in the market. For example, there are more and more electric vehicle competitors, and they are all becoming stronger and stronger, resulting in the shrinking of Tesla’s absolute competitive advantage.

The continuous and rapidly deteriorating epidemic in China, Tesla’s largest overseas market, may put more pressure on Tesla’s production and sales in China. The market is worried that China’s supply chain may continue to deteriorate due to the epidemic, which will affect the stability of Tesla’s production.

But an even bigger risk may come from Musk himself. The shrewd businessman has caused a lot of controversy by buying Twitter, an internationally renowned social media company. On Tuesday, Musk said he would step down as Twitter’s chief executive once a suitable successor was found.

Recently, Musk voted on Twitter whether his friends agreed with his resignation, and 57% of them agreed with his resignation.

It is believed that most people are in favor of his resignation in the hope that he can focus on getting Tesla’s business up. Others believe that he is not doing his job properly in the media.

Musk bought Twitter in October for $44 billion. Since Musk leaned toward conservatives, liberal advertisers withdrew after Twitter changed hands, causing considerable financial pressure on Twitter’s operations.

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