1 Question to Answer Before You Buy Block Stock
Fintech stocks, many of which previously had high valuation multiples, have gotten crushed during 2022's brooad market decline. Digital payments leader Block (NYSE: SQ) hasn't been spared: Its stock price has dropped by 55% so far this year. That might have some investors thinking that this would be a great time to scoop up its shares at a discount.
But before buying stock in Block, investors will want to assess how the company could perform in an adverse economic scenario. Many experts see just such a situation looming as the Federal Reserve continues to hike benchmark interest rates in its effort to curb soaring inflation.
Inflation is at a 40-year high, and people are feeling it keenly in their daily lives as elevated expenses for rent, food, gas, and more have forced many to tighten their budgets. Persistent supply chain bottlenecks, supply and demand imbalances in the energy sector, geopolitical turmoil, and strong consumer demand have combined to drive inflation higher in economies around the world. Now, the Fed is attempting to implement a fiscal tightening policy that both brings U.S. inflation back to normal levels and avoids putting the brakes on the economy so hard that it triggers a recession.
Source Fool.com
