On Thursday, the tech-heavy Nasdaq Composite Index fell back to a two-year low amid selling stocks including Apple Inc. AAPL and Tesla Inc. TSLA.

What happened: Renowned Apple and Tesla analyst Gene Munster took to Twitter on Thursday to offer his take on the current market malaise. He advised his followers not to think about it too much.

“It’s been a top market all year. 2008 was the same way in that there was a housing crisis looming and it came,” he said.

Munster was referring to the global financial crisis of 2007-2008 which had its origins in the collapse of the real estate market. The market plunged amid the ensuing recession, but bottomed out in early 2019 before taking off. A broader uptrend was in play until the start of the current down leg in November 2021.

The managing partner of Loup Funds said the obvious has happened, noting that the Fed had to raise rates to fight inflation, which it did this year.

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End on sight for sale? While predicting when the selloff is likely to end, Munster said consumer price inflation would need to fall below 4% before the market “gets comfortable” that it’s on its way to 2-3%.

One of the Fed’s twin goals when setting its monetary policy is to keep inflation at 2% over the long term.

While noting that the Fed expects inflation to cool to 4% by next spring, Munster said the 4% mark would likely be hit later this year or early this year. next.

“Conclusion: Sad to report, likely more downside in the months to come,” he added.

The equity market experienced a downward spiral throughout the year, driven by multiple headwinds. Given the looming uncertainty and limited visibility, analysts found it difficult to predict the bottom.

Tech and small-cap spaces led the current sell-off. Apple, which was holding up better than many of its big tech peers, came under selling pressure this week due to iPhone asks for worries.

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Snap inc. INSTANTANEOUS has been in freefall this year, with concerns over a slowdown in ad spending weighing on the stock. The Snapchat parent stocks are down about 80% year-to-date.

Chip majors including intel company INTC, Nvidia Corporation NVDA and Advanced Micro Devices Inc. AMDare all down around 50% each, reflecting weak demand and China’s chip ban.

Munster’s prediction may not be too wrong. Macroeconomic fundamentals need to stabilize for a recovery in consumer and business confidence, a prerequisite for a resumption of demand growth.