FT News Briefing January stocks hit the skids
Feb 1, 2022
The US stock market is experiencing its worst January since the 2009 financial crisis, with analysts remaining cautiously optimistic. Meanwhile, the US and European allies are preparing an unprecedented sanctions package aimed at crippling Russia's economy and targeting oligarchs. In Italy, the re-election of Sergio Mattarella provides political stability amidst rising geopolitical tensions. Additionally, the gaming industry sees landmark moves, as Sony makes headlines with its $3.6 billion acquisition of Bungie.
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Worst January for Stocks Since 2009
- U.S. stocks experienced their worst January since the 2009 financial crisis, with the S&P 500 down 5% and Nasdaq down 9%.
- Rising interest rates and inflation concerns are primary factors, impacting investor valuations of future income from stocks.
Market Downturn from Pandemic Highs
- The pandemic highs created unrealistic comparisons for current market performance.
- Current growth, while normal, appears less impressive compared to the significant rebound from the 2020 lockdown.
Impact on Speculative Tech Investors
- Speculative tech investors, particularly those in funds like Cathie Wood's ARK ETF, are most affected by the downturn.
- These funds focus on high-growth, often unprofitable companies vulnerable to interest rate hikes.