5 Reasons The Current Stock Market Crash Is Over And To Love Stocks Again

Market downturns are common, and various factors can trigger a stock market crash.

The current stock market fall has been due to the conflict in Eastern Europe and concerns about increasing inflation and interest rates. Amid all these, few signs show that investors can expect the current stock market fall is over.

High Cash Levels

As the stock market in the US nears the end of a challenging first quarter, investors are considering what can help equities in the months ahead, with high cash levels at companies one possible boost as CEOs use cash for share buybacks and dividends or mergers.

According to Credit Suisse, buybacks and dividends will increase over the next 12-24 months, boosting EPS and share prices. According to Goldman Sachs, solid EPS growth and high cash balances will promote robust corporate demand this year.

Job Growth

According to a jobs report, the US economy is recovering, and employers are hiring aggressively, adding 431,000 jobs (March 2022). It demonstrates the economy’s resiliency amid a still-destructive pandemic, Russia’s assault on Ukraine, and the highest inflation in 40 years.

Job creation reduces the unemployment rate, which is 3.6% today – the lowest rate since the pandemic and slightly higher than the half-century low of 3.5% set two years ago.

Bond Market Signals

For some investors, the inverted yield curve indicates that the economy is on the verge of a recession. However, the inverted yield curve does not forecast when one will occur, and history shows that it can take more than a year or longer.

The yield curve is considered the best market-based recession prediction. So, this appears to be scary. Many economists, however, feel that this time the inversion is different, and investors need not worry.

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