Jonathan Levin, Columnist

Bonds Will Determine Where Bear Market in Stocks Goes Next

Equities have adjusted to higher interest rates. Will they have to adjust to lower earnings?

October 21, 2022 at 9:00 AM UTC

Jonathan Levin is a columnist focused on US markets and economics. Previously, he worked as a Bloomberg journalist in the US, Brazil and Mexico. He is a CFA charterholder.

Mixed signals about the economy could make for some compelling short-term rallies in equities.
Photographer: Michael M. Santiago/Getty Images

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The bear market in US stocks may be nearing the end of Act I (adjusting to higher interest rates), and many investors are looking ahead to Act II (adjusting to lower earnings.) But the transition is taking longer than anticipated, and some are questioning whether Act II is truly coming at all.

That’s reasonable, and that uncertainty could make for some compelling short-term rallies in a stock market that’s been beaten up.