For investors, the stock market is undoubtedly one filled with mixed emotions. You laugh when the market is bullish and, on the other hand, feel sad and emotional when the market is bearish. Whichever way it plays, the stock market is interesting, to say the least.
Long-term players in the stock markets are typically a bit bearish from a technical standpoint. A bull run almost always follows a resistance level breach; presently, however, the market is far from experiencing a bull run. This is especially true with the stock of big techs slowing down globally.
Fundamentally, the Fed continues to be the central bank that the spotlight needs to be turned towards.
There are presently two sides of the coin for the Federal Reserve to pick from. One on hand, they could aim to kill inflation by increasing the interest rates, which will have a spiral effect on the real economy due to an increase in interest rates. The other side of the divide is to act by reducing the interest rate, which will allow the bubble to continue and which ultimately allow inflation to gather strength but could also eventually weaken the economy. However, a weak economy is not good for the stock market.
Much focus is placed on non-monetary inflation issues, such as supply chain issues and shortages, while monetary inflation is given less attention.
Snap Inc, which serves as the parents of Snapchat, Bitmoji, and Spectacles, is not left out of the bearish run in the stock market. Snap Inc stock declined by a whopping 40%, which is significantly less than its IPO price in January, and highlights a tremendous drop in recent times. However, this is less than its all-time low, below $5 in December 2018.
The reason? Bad forward guidance.
Snap’s quarterly and profit target set a month earlier is expected to be missed, as announced on Monday. The downside of this is that hiring and spending will be lower, which will result in other media and advertising platforms feeling the effect of this.
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