Biden’s Bear Market Could Last a Year

It’s official: the bull market in stocks ended Friday as the S&P 500 accumulated a 20.7% loss from its January high.

The S&P 500 dropped 2% on Friday, putting the benchmark for U.S. stocks 20.7% below its intraday record reached in January. The index is now headed for a close that’s more than 20% below its January record closing level as well.

So to most on Wall Street, this is now the first bear market to hit since the rapid decline in March 2020 at the onset of the pandemic.

Bear markets last an average of about a year so Americans’ 401k’s could get quite lean as the Biden bear takes a bite out of their retirement savings.

Surging energy prices caused by reckless energy policies have joined with historic inflation to destroy a once-vibrant economy. Now, Democrats’ ill-conceived plans have crash-landed on investments and it could be quite some time before things get better.

“At some point the market will turn, but it won’t be until these winds are shifting, inflation is coming down and consumers are feeling good about spending money again like they want to and are used to. These are pretty long cycles,” said Johan Grahn, head of ETF strategy at Allianz Investment Management.

Bear markets, in all but one instance in the last 50 years, are accompanied by a recession. As the Federal Reserve is on a rate-hike bender, analysts have cast little doubt about the shrinking economy to come.

“With Federal Reserve policy still poised to accelerate the pace of tightening, with balance-sheet reduction entering the mix and inflation proving somewhat stubborn, investors are shifting their gaze toward potential for a growth scare if not an outright recession,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, wrote Monday.

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