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HomeMarket5 Reasons for Investors to Be Thankful This Thanksgiving

5 Reasons for Investors to Be Thankful This Thanksgiving

Slowing inflation and smaller Fed rate hikes are two things for which investors can give thanks.

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Eugene Gologursky/Getty Images for Macy’s Inc.

As investors settle around the table for Thanksgiving, it may feel like it’s been a trial to get this far.

Bear markets attacked early this year, striking both stocks and bonds. Runaway inflation, the threat of an energy crisis, and the steepest interest-rate hikes in a generation have made the road long and winding. And, of course, we’re by no means out of the woods yet.

But still, there remain many things for which to be thankful—especially as we look toward 2023.

For a start, the Federal Reserve minutes on Wednesday confirmed the dark days of monster rate increases are over. A mere half-point hike is probably coming on Dec. 14. That feels good, even if it looks like rates have to eventually go higher than previously thought.

Second, oil prices have retreated to around the level they were at the beginning of the year. Seeing as how it was energy that really fanned the inflation flames, this is certainly helpful.

It’s definitely good news for Europe, which was affected the most by Russia’s surprise invasion of Ukraine in February. There is still a risk of gas shortages, but months of stockpiling for winter means the outlook for the continent is better than it was just a few months ago. 

Germany, Europe’s biggest economy, in particular appears to be on track to avoid collapse as the weather turns cold. That’s great for any company that sells into global markets.

Stocks may have already hit a bottom. The decline from the S&P 500’s peak has shrunk to 17% from as low as 25% earlier in the year. That’s a good sign, especially if inflation keeps slowing and consumers keep spending.

Finally, crypto has had a particularly bad time, losing more than two thirds of its value. A lot of people have lost a lot of money. But while it’s hard to be thankful for the rapid decline of bitcoin’s value or demise of the FTX exchange, there are reasons to be grateful. The biggest perhaps is that the cavalry of regulation is coming to protect investors in the future. That’s good news for both the true believers who see crypto as the future and the skeptics who thought it was a scam.

So enjoy that second slice of pumpkin pie. Things are looking up, even if it’s been a terrible year.

Write to brian.swint@barrons.com

Credit: marketwatch.com

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