The stock market has been going through a particularly volatile period over the last few months. Crypto is down across the board, blue-chip stocks are all over the place and it’s got investors worried. So, what’s going on? Of course, there are some company-specific factors to consider, but there are also a number of factors to consider that are affecting the stock market as a whole at the moment.
How Has The Tech Stock Market Been Performing?
The first thing to consider is that we’re just recovering from a recession caused by the pandemic. Previous recessions have shown that the recovery is always a particularly volatile time for the stock market. People are tense about money and this may lead more cautious investors to get nervous and sell, at the same time as long term investors are buying on the dip. People are also much more tuned to the financial news and quick to make a decision driven by their emotions rather than logic.
What Else Should We Take Into Consideration?
Additionally, the argument between Meta and the EU around exporting data is likely to be affecting all multi-national companies in some way at the moment. While Meta is at the centre of the debate there are thousands of companies that have offices in both the US and EU and share data between the two. Most multi-national companies are going to be affected to some extent by the situation with Meta at the moment. Having said that Meta stocks are proving to be some of the most volatile on the market at the moment as a result of them threatening to pull out of Europe entirely. Of course, in addition to these overarching issues, a lot of companies are experiencing volatility for other reasons.
Companies That Are Up And Down
PayPal has experienced some of the worst volatility on the market at the moment, with a lot of the blame being on investors shifting strategy away from long term growth towards shorter wins, as well as some disappointing revenue announcements. During the third-quarter earnings call, PayPal said that they expected 18% revenue growth, but has now forecast just 15% for 2022. New user accounts boomed during the pandemic and, while the company is still highly profitable, they’re now struggling to bring in new users with the world going back to normal. PayPal only expects the net revenue growth for Q1 of 2022 to be 6%. Effectively, PayPal is a victim of its own success because they aren’t able to match the growth it experienced during the pandemic.
Apple is another company that is very much on the watch list. As a blue-chip stock, they’ve previously been considered a safe bet. In fact, one analyst referred to Apple stocks as a safe place to ride out the volatility in January 2022, with new product launches in the pipeline likely to help this in the long term.
Despite this advice, Apple stocks are down 2.56% over the past month and down 7.35% on the year to date. The advice to hold onto Apple stock or buy in now might be sound advice, however. Analysts at Deutsche Bank stated that it was a good time to buy Apple stocks and even upped the price target from $175 to $200, suggesting a possible 15.6% upswing. Having said that, Apple’s stocks have remained fairly stable as a result of feared price hikes and inflation concerns. The Federal Reserve is due to make a decision on whether to increase the interest rate in March so a lot of investors are holding out until this situation becomes more certain. Federal Reserve Chairman Jerome Powell indicated that it was likely to happen during his last two monthly press conferences, so it’s possible that investors will have their answer by the end of February.
The Start of 2022
The start of the year is always a challenging time for investors. Companies tend to make less profit as consumers don’t have money to spend, coupled with brands using the quiet periods to make changes to their business, spend time researching or increasing pricing. The advice has always been for amateur investors to stay away from making their first trades at the start of the year, but this year is particularly volatile thanks to the combination of post-recession uncertainty and tension between the EU and US over privacy concerns. It’s simply going to be impossible to predict for a while.
What Does The Future Look Like For Stock Investments?
While no one can predict with real certainty what the stock market is going to do moving forward, the iGaming marketing going through changes throughout the US is likely to help. Other things to consider are that PayPal is active across a number of markets, including iGaming – recent legalisation across US states and the increasing number of compatible PayPal casinos in the US which is likely to help a range of companies that are active in those industries.
If you’re considering any type of investment then the best piece of advice that can be given is to make sure that you do your research and keep up to date with the latest industry news before you make any decision. Looking at what a certain stock has performed like in the past is also helpful. Being as informed as possible when it comes to making any financial investment gives you the best possible chance of your investment being successful. For example, there are plenty of rumours regarding new Apple products and iPhones following the successful launch of the new Samsung S22 Ultra. Being aware of these product launches gives you the perfect opportunity to consider your investment and when might be the best time to invest. Overall, both the tech and the financial sectors are looking strong and as such, they could very well be a great investment for you, but doing your research and making the right decision for your needs is a must.