Presented by Matt Glova and the LifeTime Asset Management team:
Weekly Market Update, July 25, 2022
U.S. Treasury yields were down last week as expectations of a recession and a potential slowdown in rate increases from the Federal Reserve (Fed) were reflected in fixed income markets. Economic data releases suggested a slowing of the global economy. Global equity markets rallied last week, with bond yields coming down as central banks continue to examine policies to combat
Weekly Market Update, July 18, 2022
Last Wednesday, U.S. inflation numbers for the month of June were released and the Consumer Price Index (CPI) report exceeded expectations with an increase of 9.1 percent year-over-year. Markets sold off slightly last week as a higher-than-expected inflation report led to uncertainty around Fed policy.
Weekly Market Update, July 11, 2022
Following last week’s release of the Federal Reserve (Fed)’s June meeting minutes, all eyes now turn toward the July meeting. With core inflation remaining stubbornly higher than the Federal Open Market Committee (FOMC) would like, another large rate increase could be in the cards. Markets rallied in the holiday shortened week as better-than-feared sentiment stemming from a number of areas—including easing commodity prices, a better-than-expected June employment report, and a stronger sales report from Samsung—appeared.
Weekly Market Update, July 5, 2022
The balancing act continues following the 75 basis point (bp) interest rate hike at the 6/14–6/15 Federal Open Market Committee (FOMC) meeting. The Federal Reserve (Fed) aims to bring inflation closer to its 2 percent target without sending the country into a recession. Markets sold off as investors took a risk among concerns over cuts to earnings and softening economic data. While inflation fears may be easing from declining consumer confidence and personal spending, recession fears are picking up.
Market Update for the Quarter Ending June 30, 2022
June Selloff Adds to Challenging Quarter for Markets
Equity markets experienced widespread selloffs in June. Fears of a potential recession and high inflation weighed heavily on investors, capping off a challenging second quarter. All three major U.S. indices ended the month and quarter down: the S&P 500 lost 8.25 percent (month) and 16.1 percent (quarter); the Dow Jones Industrial Average lost 6.56 percent (month) and 10.78 percent (quarter); and the Nasdaq Composite lost 8.65 percent (month) and 22.28 percent (quarter).
Recession and Inflation Spook Investors
Second-quarter market underperformance was largely driven by investor concerns about inflation. The Federal Reserve (Fed) spent the quarter trying to combat inflation by tightening monetary policy, and the central bank plans on continuing to hike rates until there is evidence of inflation slowing. Higher interest rates caused markets to reprice equities and fixed income investments.
Economy Continues to Grow
Economic data releases showed signs of growth. Hiring was strong for the month and quarter, with the May job report showing 390,000 added jobs and a 3.6 percent unemployment rate. This is largely in line with the pre-pandemic low of 3.5 percent and highlights progress since Covid-19 lockdowns in 2020.