Market Insights - September 23, 2022
EQUITIES SUFFER AGAIN AS FED RAISES RATES BY 75 BPS AGAIN
Stocks had another rough week as the Fed pushed rates up by 75 basis points and suggested that more rate hikes are to come. Yes, Wall Street was banking on a rate hike – as the futures market put odds at virtually 100% that rates were going up this week – but investors were unnerved, nonetheless.
Not surprisingly, the technology-heavy NASDAQ were hit the hardest, as investors are discounting future earnings given the pace and magnitude of predicted rate hikes. For perspective, rates are at the level not seen since March 2008 – and that was when the Fed was cutting rates.
Market Insights - September 16, 2022
EQUITIES SUFFER AS PEAK INFLATION HOPES ARE DASHED HIKES
Wall Street suffered its largest weekly drop in about 3 months as worries that inflation hasn’t peaked took center stage. And while most everyone was talking about how rough it was for equities, short-term bond yields hit levels not witnessed since 2007 too. It was a rough week.
Not surprisingly, growth stocks were hit harder than their value counterparts and the tech-laden NASDAQ fared the worst, dropping over 5%. And fittingly, Communication Services and Information Technology sectors were hard hit, as Google parent Alphabet and Facebook parent Meta Platforms hit fresh 52-week lows. Real Estate was also hit especially hard, losing over 5%.
S&P 500 Sector Performance for August 2022
For the month of August, sector performance was not good, as 9 of the 11 sectors declined for the month. Contrast that with the month of July, which saw 10 of the 11 advance and June, which saw all 11 retreat.
And while eight months is not very helpful when trying to draw conclusions, it is interesting to see the difference a few months can make, as investors were reeling in January when 10 of the 11 sectors were red (with only Energy gaining that month); March saw 10 of the 11 positive; April and May saw a mixed bag; June was all negative; July was overwhelmingly positive and August was mostly negative.
Market Insights - September 9, 2022
WALL STREET SNAPS 3-WEEK LOSING STREAK AS THE FED SUGGEST INFLATION MIGHT BE MODERATING AND OIL PRICES DECLINE AGAIN
Equities snapped a three week losing streak, as the major indices erased most of last week’s declines while investors grew confident coming out of the Labor Day weekend.
There was no big economic news or earnings reports that pushed Wall Street higher, but there were some subtle feelings that maybe we are close to a bottom – as oil dropped, inflation appeared to moderate in some spots, manufacturing came in stronger than expected and jobless claims pointed to a still healthy but tight labor market.
Looking at inflation, Wall Street took note of the Fed’s Beige Book, which summarizes economic reports from its branches, as it indicated that there are signs that inflation might be cooling. Specifically, the Beige Book indicated that price increases were moderating in 9 of the 12 districts, mostly driven by lower fuel prices.
Market Insights - September 2, 2022
EQUITY MARKETS RETREAT ON MORE HAWKISH FED COMMENTS AS JOB OPENINGS HIT NEAR RECORD LEVELS AND OIL PRICES DROP
Stocks ended the month of August and started the month of September on a losing streak, finishing lower for the month and for the third consecutive week. The driving force behind the selling was mostly attributed to the very-hawkish messages from Fed, including Fed Chair Jerome Powell’s recent speech at Jackson Hole on August 26th, but also comments from a Fed President suggesting that rates should be around 4.00% by early next year.
Market Insights - August 26, 2022
EQUITY MARKETS RETREAT ON HAWKISH FED COMMENTS AS VOLATILTY SPIKES AND INVENTORY OF NEW HOMES LEAPS TO 2008 LEVELS
Stocks started the week by heading lower, saw modest gains mid-week and ended Friday sharply lower, as investors felt less convinced that the Fed might engineer a soft landing in its rate-hiking policy. The good news (maybe) is that it was a slower summer trading week in terms of volumes, whereas the bad news is that just about everything except Energy had a rough week.
As one might expect amidst rate-hiking worries, the technology and high-growth stocks really underperformed, underscored by NASDAQ falling to its lowest level in about a month.
Market Insights - August 19, 2022
EQUITY MARKETS SNAP WINNING STREAK AT 4 AS RETAIL SALES COME IN STRONG AND THE FED CONTEMPLATES ANOTHER 75 BASIS-POINT HIKE
This week saw an end to 4 consecutive weeks of gains for equities and many felt as if investors were taking money off the table, given the recent run-up in stocks since mid-June. But underlying that sentiment was also worry that inflation may not have peaked, as the UK reported inflation north of 10%, with predictions for inflation reaching more than 13% over there this fall. Further, comments from a self-described hawkish Fed board member saying he supported another 75 basis-point rate hike this September caused Wall Street to hit the pause button.
Market Insights - August 12, 2022
EQUITY MARKETS MAKE BIG MOVES AS INFLATION SLOWS DOWN AND WALL STREET HOPES THAT THE FED MIGHT SLOW DOWN RATE HIKES
Stocks made a big jump this week after Consumer Price Index and Producer Price Index data showed signs that inflation – while still high – might be starting to slow. Numerous Fed officials reiterated the Fed’s fighting-inflation-stance, but Wall Street nonetheless traded on the good CPI and PPI news.
Interestingly, Wall Street also lowered its expectations for a 75-basis-point rate hike in September.
Market Insights - August 5, 2022
EQUITY MARKETS MIXED AS JOBS REPORT COMES IN STRONG AND OIL DROPS TO LOWEST LEVEL SINCE BEGINNING OF UKRAINE WAR
Stocks were mixed for the first week in August, hampered by a stronger-than-expected jobs report that caused Wall Street to once again worry that the Fed will maintain its aggressive rate-hiking schedule this year. Friday’s jobs report from the Labor Department showed employers added 528,000 nonfarm jobs in July, which was more than double consensus expectations. After July’s strong numbers, total nonfarm employment in the U.S. is back to its pre-pandemic level.
S&P 500 Sector Performance for July 2022
Sector Highlights Through July 2022 For the month of July, sector performance was very good, as 10 of the 11 sectors advanced for the month, with only Communication Services (-1.38%) retreating. Contrast that with the month of June, which saw all 11 retreat for the month. And while seven months is not very helpful when trying to draw conclusions, it is interesting to see the difference a few months can make, as January saw 10 of the 11 sectors red (with only Energy green); March saw 10 of 11 positive; April and May saw a mixed bag; June was all down and July was all up.
Market Insights - July 29, 2022
STOCK MARKETS ADVANCE DESPITE A TON OF NEGATIVE ECONOMIC DATA, INCLUDING HOUSING, MANUFACTURING AND JOBLESS CLAIMS
U.S. equity markets jumped again this week, despite the Fed raising rates by another 75-basis-points and news that the U.S. economy shrank by 0.9% in the second quarter – putting us in a technical recession. On the week, growth stocks handily outperformed value stocks as earnings came in better than feared, along with a few positive surprises, notably Amazon and Apple. The Federal Reserve was on everyone’s radar this week, as it pushed its fed funds rate to 2.25-2.50%, as everyone expected. But Federal Reserve Chair Jerome Powell seemed to appease Wall Street with his press conference when he talked about the need to continue fighting inflation while also hinting that the pace of future rate hikes might slow.
Market Insights - July 22, 2022
STOCK MARKETS ADVANCE DESPITE A TON OF NEGATIVE ECONOMIC DATA, INCLUDING HOUSING, MANUFACTURING AND JOBLESS CLAIMS
Wall Street welcomed this week’s positive sentiment and positive numbers, as the end of last week’s momentum carried over through Thursday, until Snap released its earnings (and got hammered). Still, there were a lot of positive developments on the week when it came to market performance, corporate earnings, and investor sentiment, as all the major equity markets advanced, with smaller-caps leading the way. Growth outpaced Value this week, and the Consumer Discretionary names – pushed forward by Amazon and Tesla – really outperformed.
Market Insights - July 15, 2022
INVESTORS SEE ANOTHER VOLATILE WEEK AS INFLATION NUMBERS COME IN RED-HOT AND Q2 EARNINGS REPORTS START TO ARRIVE
U.S. Stock Markets Retreat Then Rally on Inflation Concerns Wall Street was tense all week, as looming inflation data from consumers and suppliers were on the week’s docket of economic reports set to be released. The good news on the week is that while stocks did get hammered early on, starting Thursday morning investors witnessed a decent rally that brought markets back to slightly less than where they started. The other good news on the week was that it was actually a pretty light trading week, in terms of volume.
Market Insights - July 8, 2022
STOCK MARKETS END THE WEEK UP AS HOPES FOR A SOFT LANDING INCREASE AND AS JOBLESS CLAIMS SURPRISE
U.S. equity markets clawed back most of last week’s decline as Wall Street gained a little bit of hope that the Fed might be able to engineer a soft landing after all (i.e., bring inflation down without causing a slowdown in growth). And while the positive numbers were not huge, they were celebrated as the gains took the S&P 500 out of bear market territory, as it is now down 19% from its January high. And the sectors that led this week’s gains have been dormant for quite a while, as the Communication Services, Consumer Discretionary, and Information Technology sectors all outperformed and rose more than 4% each. The Energy sector, on the other hand, dropped fast on the day after the 4th of July as oil tumbled below $100/barrel for the first time in two months, but then rallied later in the week to about $105/barrel. Still, a barrel of oil was more than 3% cheaper when the week was over.
Market Insights - July 1, 2022
STOCK MARKETS END THE WEEK, MONTH, QUARTER AND YTD DOWN AS INFLATION AND THE FED CONTINUE TO WORRY WALL STREET
The week saw a foursome of endings, as investors digested the ends of the first six months of the year, the second quarter, the month of June and the week. And all of those periods were negative. But the media was mostly focused on the end of the first half of the year and headlines kept screaming things like “worst first six months in 50+ years.” No matter the headlines, the truth is that U.S. equity markets did turn in a terrible second quarter to add to a not-so-great first quarter, pushing the major equity markets to levels not seen in a long time. And while many are suggesting that there is more pain to come from this bear, there are also plenty of others suggesting that the worst is behind us. But we of course won’t know for sure for another six months.
Market Insights - June 24, 2022
STOCK MARKETS CATCH FIRE AS SUMMER STARTS AND WEAK ECONOMIC DATA SUGGESTS THAT INFLATION MIGHT BE MODERATING
It was a holiday-shortened week, but Wall Street also welcomed the first day of summer as equities turned in a blistering rally, jumping more than 5% and erasing last week’s cold, winter-like returns. And while there was not any single catalyst that propelled markets, it was almost as if a few not-so-great economic reports caused Wall Street to hope that inflation might be moderating and that a soft-landing is indeed possible. When the week was over, 10 of the 11 S&P 500 sectors were positive, while the Energy sector was the only one registering negative weekly returns, as oil pulled back to just over $100/barrel.
Market Insights - June 17, 2022
STOCK MARKETS RECORD WORST WEEK SINCE MARCH 2020 AS THE FED RAISES RATES SIGNIFICANTLY AND FEARS OF A RECESSION INTENSIFY
Everyone knew the Fed was going to raise rates and some might have been surprised at the 75 basis point-hike, the most aggressive since 1994. But Wall Street nonetheless traded much lower, as fears that a recession is in the cards spooked investors. Besides it being another big week of losses (the major equity indices were down over 4% last week too), we also saw the S&P 500 record its worst weekly drop since March 2020 and saw it firmly jump into bear market territory.
Market Insights - June 10, 2022
STOCK MARKETS SEE UGLY DECLINE AS INFLATION HITS ANOTHER 40-YEAR RECORD AND CONSUMER SENTIMENT HITS WORST-EVER MARK
U.S. equity markets registered some ugly losses this week, despite having gone up on Monday and Tuesday. Most of the negative sentiment began to percolate on Thursday and then really bubbled over on Friday when hotter-than-expected inflation numbers were released in the morning. There was a lot of negative economic data on the week, especially buried among the details of the CPI data from the Bureau of Labor Statistics. But there was also plenty of negative data early in the week from retailers and manufacturers and as the week wore on, many retailers were suggesting that inventories could be problematic in the short-term.
Market Insights - June 3, 2022
EQUITY MARKETS COOL AS WALL STREET HOLDS ITS BREATH HOPING THE FED CAN ENGINEER A SOFT LANDING WITHOUT CAUSING A RECESSION
U.S. equities gave back some of the previous week’s gains, as Wall Street continued to cast doubt over whether the Fed might engineer a soft landing as it seeks to curb inflation without triggering a recession. While it was only a four-day trading week as markets were closed Monday in observance of Memorial Day, much of what unsettled investors were comments from JPMorgan Chase CEO Jamie Dimon who said he saw an “economic hurricane” coming. Then when Tesla CEO Elon Musk said he had a “super bad feeling” Wall Street was further unnerved. Finally, Musk capped off that comment with an announcement that Tesla needed to cut 10% of its workforce, freeze hiring and that its employees needed to return to offices. There was a lot of economic data reported in the short-week, and much of it actually argued against a looming recession, especially on Friday when the Labor Department announced that employers added 390,000 nonfarm jobs, well ahead of expectations.
Mixed S&P 500 Sector Performance for May 2022
For the month of May – as was the case in April – sector performance was mixed, as 6 of the 11 S&P 500 sectors were green (versus 4 of the 11 in April). And while five months is not very helpful when trying to draw conclusions, it is interesting to see the difference a few months can make, as investors were reeling in January when 10 of the 11 sectors were red (with only Energy gaining that month), March saw 10 of the 11 positive and April and May saw a mixed bag.
Market Insights - May 28, 2022
EQUITY MARKETS LEAP ON HOPES THAT INFLATION IS PEAKING AND AS INVENTORIES ARE BUILDING UP AND HOUSING IS COOLING OFF
Stocks Finally Head North After 7 (and 8) Consecutive Declines It was a fantastic week for U.S. equity markets, as the major indices jumped more than 6% on the week. Every single one of the 11 sectors in the S&P 500 advanced, with Consumer Discretionary and Energy making big leaps and Health Care under-performing relative to the others. There was some optimism on Wall Street and Main Street that inflationary pressures might have or might be peaking. The second estimate of GDP saw some downward revisions and manufacturing output and new orders were strong. But it was consumer spending that excited Wall Street.
Market Insights - May 20, 2022
EQUITY MARKETS RETREAT FOR THE SEVENTH WEEK IN A ROW AS EARNINGS DISAPPOINT, ESPECIALLY AMONG THE LARGE RETAILERS
It was another rough week for U.S. equity markets, as equities retreated for the seventh week in a row as volatility was rampant. The biggest drivers of worry were interest rates and inflation, as Wall Street felt another week of negative sentiment, especially within the tech and growth names. Those two sentences have been used to describe the past couple of months of market performance.
Market Insights - May 13, 2022
EQUITY MARKETS RETREAT FOR THE SIXTH WEEK IN A ROW AS VOLATILITY SPIKES AND HEADLINE INFLATION REMAINS WAY TOO HIGH
It was another rough week for U.S. equity markets, as equities retreated for the sixth week in a row as volatility was rampant. The biggest drivers of worry were interest rates and inflation, as Wall Street felt another week of negative sentiment, especially within the tech and smaller-cap names. Interestingly, those two exact sentences were used to describe last week’s markets – except the word “fifth” was replaced with “sixth.”
Market Insights - May 4, 2022
Construction Spending Up Slightly This Past Month and Up Dramatically Since This Time Last Year
Construction spending is viewed as a good indicator of the economy's momentum because both individuals, businesses and our governments generally only put money into construction when they are confident to justify the building expenses (that might not be as true with respect to our local-, state- and federal-government, but that’s another topic altogether). On May 2nd, the U.S. Department of Commerce reported on construction spending which follows.
Mixed S&P 500 Sector Performance - April 2022
Only 4 of the 11 sectors were positive and the range was unusually wide
For the month of April, sector performance was mixed, as only 4 of the 11 S&P 500 sectors were green, compared to 10 of the 11 last month. And while four months is not very helpful when trying to draw conclusions, it is interesting to see the difference a few months can make, as investors were reeling in January when 10 of the 11 sectors were red (with only Energy gaining that month), March saw 10 of the 11 positive and April saw a mixed bag.
Market Insights - April 30, 2022
MARKETS RETREAT AGAIN THIS WEEK AS GDP GOES NEGATIVE AND PREDICTIONS FOR A RECESSION AND STAGFLATION GET LOUDER
It was another really rough week for U.S. equity markets, as the major indices recorded their fourth consecutive week of declines and closed the books on the month of April. When the week was over, there were a few ugly milestones that Wall Street recorded. On Tuesday, the U.S. Census Bureau announced the Advance Durable Goods Orders report for March.
Market Insights - April 22, 2022
MARKETS LOSE GROUND AGAIN THIS WEEK AS THE 10-YEAR JUMPS AND INVESTORS’ BULLISHNESS HITS A NEW 30-YEAR LOW
Once again, the major U.S. equity indices lost ground, marking the 3rd consecutive losing week for the S&P 500 and the 4th for the DJIA. And as has been the case for the past few weeks and months, the value-names outperformed the growth names and the mid-caps outperformed the large-caps, although the smaller-caps performed worse than both the mid- and large-caps.
Market Insights - April 15, 2022
MARKETS RETREAT AGAIN AS 40-YEAR HIGH INFLATION NUMBERS RATTLE WALL STREET, ESPECIALLY THE GROWTH AND TECH NAMES
U.S. equity and bond performances were down again this week, as Wall Street digested very frothy inflation numbers as first quarter earnings season kicked off. As was the case last week, growth names and large-cap tech names were hit especially hard. Value stocks continued to outperform their growth cousins, but the small-caps picked up some momentum and outperformed the larger-caps.
Market Insights - April 6, 2022
Factory Orders Down for First Time in 10 Months as Backlogs Persist
Factory orders represent the dollar level of new orders for both durable and nondurable goods. The data shows how busy factories will be in coming months as manufacturers fill those orders (it is technically called the Manufacturers’ Goods Report). This report provides insight to the demand at factories making all kinds of goods, and in addition to tracking new orders, it is worth paying attention to unfilled orders too as that is an indicator of production backlogs.
Market Insights - April 1, 2022
MARKETS MIXED AS THE MONTH AND QUARTER COME TO A CLOSE, GDP IS REVISED DOWN AND CORE PCE PRICE INDEX HITS HIGHEST LEVEL SINCE 1983
Despite a mixed week for U.S. equity markets, Wall Street reversed the negative course of the past two months and ended March in positive territory. But it was still not enough to overcome the biggest two-month drop (January and February) since March 2020 as markets ended the 1st quarter of 2022 in the red – the first since the 1st quarter of 2020. On the week, it was the defensive-Real Estate (+4.4%) and defensive Utilities (+3.7%) sectors that outperformed while the interest-rate-sensitive Financials (-3.3%) and the oil-sensitive Energy (-2.4%) sectors underperformed. The major theme driving markets was once again the war in Ukraine. The week started off well for markets as there were reports that Russia and Ukraine were inching closer to a cease-fire, but then by mid-week the markets four-day winning streak was snapped when Russia said that a cease-fire agreement was not very close.
Market Insights - March 25, 2022
MARKETS UP TWO WEEKS IN A ROW AS OIL AND THE 10-YEAR JUMP WHILE WALL STREET TRIES TO PREDICT THE FED’S RATE-INCREASE-PATH
Volatility trended down this week, but just about every single day saw a spike, usually right around the lunch-hour. But when the week was over, the three major U.S. equity markets were higher as the smaller-caps struggled just a little bit. While two weeks certainly doesn’t make a trend, glass-half full investors were celebrating that the S&P 500 closed at its highest level since February 10th. Speaking of that daily volatility spike, if you paid attention to market levels throughout the day, you could detect a clear pattern: markets traded lower in the morning, volatility spiked around lunch and then markets traded higher in the afternoon. In fact, Bloomberg reported that the S&P 500 had gained one-third of one percent in the last hour of trading for five consecutive days—the longest streak in two decades. Some might call this “buy-the-close.”
Market Insights - March 18, 2022
MARKETS MAKE HUGE LEAPS AS OIL PRICES RETREAT AND AS THE FED INCREASES THE FED FUNDS RATE
Equities jumped on the week, putting a halt to the recent 5-week slide and making up considerable ground at the same time. There really wasn’t one or two main drivers of performance, but sliding oil prices, the Fed’s policy meeting and maybe a lot of “buy the dip” seemed to contribute to the week, which ended with 4 consecutive up-days. Gains were everywhere except the Energy sector, which dropped more than 3% as oil slid below $100/barrel mid-week before coming to rest at about $105/barrel. NASDAQ had a monster week, leaping over 8%, which was a little surprising given that in the middle of this week the Federal Reserve moved its fed funds target rate from near zero to a range of 0.25% to 0.50%. And that usually causes stocks – especially tech stocks – to lose ground. The other good news on the week is that NASDAQ is no longer considered to be within bear-market territory and the DJIA, S&P 500 and Russell 2000 are no longer in correction territory.
Market Insights - March 11, 2022
MARKETS RETREAT FOR THE FIFTH WEEK IN A ROW AS SURGING INFLATION, OIL PRICES AND COMMODITIES ROIL WALL STREET
For the 5th consecutive week, Wall Street endured volatility and ended the week lower than where it started, as all the major U.S. equity markets lost ground and the 10-year Treasury yield hit that purely-psychological 2.00% threshold. And on Tuesday, NASDAQ officially entered bear market territory, defined as a loss of 20% from its recent peak (NASDAQ is off 22% from its recent peak). Silver lining (not really) is that the S&P 500 has a ways to go until it hits bear market ground, as it’s off 14% from its recent peak, still solidly in correction territory. Commodity prices jumped on the week, as oil hit $139/barrel, a level not seen in almost 15 years, as President Biden announced that the U.S. was cutting off all imports of Russian oil and gas. But other commodities are surging too, including nickel and wheat. In fact, nickel got so out of hand early in the week that trading was suspended as it doubled in value in a single day. But it was still the price of oil that dominated the economic news, especially relative to CPI numbers.
Market Insights - March 4, 2022
MARKETS SUFFER MORE VOLATILITY AS CONDITIONS WORSEN IN UKRAINE AND AS OIL PRICES SKYROCKET 25% ON THE WEEK
Markets Drop as Oil Prices Surge. It was another volatile week for Wall Street, as Russia’s invasion of Ukraine intensified, pushing domestic markets to slump, developed-international markets to retreat and emerging markets – especially those in Eastern Europe – to continue dropping significantly. When the week was over, U.S. equity markets were lower, pushing NASDAQ further into correction territory for the year and leaving the DJIA and S&P 500 one or two poor trading days away from correction levels.
Global Market Commentary - February 2022 Recap
Military conflicts have not been a major factor in market movements for decades. But Russia’s invasion of Ukraine has put global relations back on investors’ minds. Since the fall of the Soviet Union, investors have enjoyed decades of global economic stability in which military conflicts and foreign diplomacy played a diminished role in the movements of markets. But Russia’s invasion of Ukraine is the most overt sign of a recent change in that dynamic as increased jostling among powerful nations will have sweeping consequences for investors.
Market Insights - February 25, 2022
MARKETS ENDURE MORE VOLATILITY AS RUSSIA INVADES UKRAINE BUT REBOUND WHEN RUSSIA INDICATES IT IS READY FOR DIPLOMATIC TALKS
Markets Rebound Late in the Week After Falling Big It was a holiday-shortened week for Wall Street, but wow did investors deal with a lot (markets were closed Monday in observation of Presidents Day). Worries of a Russian invasion of Ukraine came true and volatility spiked on Thursday to a 2-year high as markets dropped dramatically, especially the futures markets on Wednesday night. For perspective, on Thursday, NASDAQ saw a daily swing of almost 7%, trading down by almost 4% and then recovering and tacking on a gain of 3.5% for the day. Here is another example of volatility – Tesla added about $100 billion to its market cap on Thursday alone – but was still down more than 5% on the week.
Market Insights - February 18, 2022
MARKETS RETREAT AGAIN AS INFLATION RAGES, WALL STREET PREPARES FOR FED RATE HIKES AND THE WORLD BRACES FOR A RUSSIA INVASION
The themes of this week were the exact same themes as the prior week: more inflation and worries about a Russian invasion of Ukraine. And while the former saw the Producer Price Index leap almost 10% year-over-year, it was the latter that pushed Wall Street’s emotions all over the board. When the market closed on Friday afternoon, the major U.S. equity indices recorded their second consecutive weekly decline, pushing the YTD numbers further into the red. All the major U.S. equity indices recorded losses of at least 1% and now NASDAQ and the Russell 2000 are solidly within the double-digit loss column for 2022, with the S&P 500 about one poor trading day away and the DJIA about two away. If there was any good news on the week, it was that trading volumes were light as Wall Street eagerly awaited the upcoming long weekend. Markets scheduled to be closed on Monday, February 21, in observance of Presidents Day.
Market Insights - February 12, 2022
LARGE CAPS RETREAT AS SMALL- AND MID-CAPS ADVANCE AMIDST 40-YEAR-HIGH INFLATION NUMBERS AND WORRIES OVER UKRAINE
It was another volatile week, especially on Thursday and Friday and the major large-cap U.S. equity indices gave back last week’s gains, while the smaller-cap Russell 2000 and MSCI EAFE (developed, international equities) advanced on the week. The themes of the week were twofold: more inflation and worries about a Russian invasion of Ukraine.
Market Insights - February 4, 2022
MARKETS RISE DESPITE ANOTHER VOLATILE WEEK ON STRONG JOBS DATA AND DESPITE OIL GETTING A LOT CLOSER TO $100/BARREL
Equity markets continued their volatile ways, but when the week concluded, all the major U.S. indices were green. The markets were marching steadily along until about Wednesday afternoon and when markets opened Friday morning, investors were seeing a lot of red, somewhat driven by large tech names (Facebook) that seemed to pull the markets down. For perspective, on Thursday alone (the day Facebook reported earnings and its stock tumbled 25%), the DJIA had dropped 1.5%, the S&P 500 declined 2.4% and NASDAQ cratered 3.7%.
Market Insights - January 28, 2022
MARKETS MIXED AS VOLATILITY JUMPS AMIDST FED WORRIES, A BIG EARNINGS WEEK AND MUCH BETTER-THAN-EXPECTED GDP NUMBERS
It was a very volatile week for equities and there were a lot of large intraday swings as most of the week seemed to continue last week’s hammering. But when it was over, the larger-cap DJIA and S&P 500 wrung out modest gains, almost right after moving into correction territory. The small-cap Russell 2000 Index, however, did not fare as well, dropping 1% on the week and flirting with bear market territory, as it is off almost 20% from its peak last November. Volatility as measured by the CBOE Volatility Index reached its highest level since the beginning of the pandemic. And January has seen a significant increase in volatility too.
Market Insights - January 21, 2022
MARKETS GET HAMMERED AS WORRIES ABOUT PROFIT MARGINS TAKE CENTER STAGE AND NASDAQ ENTERS CORRECTION TERRITORY
On the third week of 2022, equity markets hit levels not seen in some time, and the levels were not good ones either. The S&P 500 saw its biggest decline in about 14 months and NASDAQ saw its biggest decline since the start of the pandemic, ending the week comfortably in correction territory as it is off more than 10% since its recent highs. Rising interest rate fears and future growth prospects seemed to worry Wall Street and every day seemed to be worse than the previous – and there were only 4 trading days because markets were closed Monday in observance of the Martin Luther King, Jr., holiday. Declines were everywhere, as all of the S&P 500 sectors ended the week in the red. And there was a lot of negative news from big household names too – including JP Morgan Chase, Goldman Sachs, Netflix, and Peloton.
Market Insights - January 14, 2022
MARKETS RETREAT FOR THE SECOND WEEK IN A ROW, AS INFLATION HITS HIGHEST LEVEL IN DECADES & THE BIG BANKS DISAPPOINT
The U.S. equity indices recorded their second weekly loss to start 2022, driven by inflation worries and disappointing earnings from the big banks. While inflation dominated the headlines – with the Consumer Price Index and Producer Price Index coming in much hotter than expected – the big banks disappointed on Friday after reporting lower profits in the final quarter of 2021. The Energy sector outperformed all others, driven by a jump in oil prices, pushing oil to prices not seen since last fall. And the defensive names (Utilities and Real Estate) underperformed on the week too.
Market Insights - January 7, 2022
MARKETS RETREAT ON THE WEEK, AS GROWTH AND TECH ARE HIT ESPECIALLY HARD AFTER THE FED ADOPTS A HAWKISH STANCE
Stocks hit record highs at the beginning of the week, but then the minutes from the Fed’s December FOMC meeting were released and Wall Street rotated away from the growth and tech names into the value and defensive plays as bond yields increased. NASDAQ was hit especially hard, as it suffered its biggest one day decline since February of last year, as rising rates can take a toll on future earnings. Energy stocks on the other hand, had a fantastic week, as the price of WTI Crude seems headed for that $80/barrel threshold.
Market Insights - December 31, 2021
MARKETS END THE WEEK MOSTLY POSITIVE AS HOUSING AND JOBLESS CLAIMS SURPRISE ON THE UPSIDE AMIDST MUTED TRADING VOLUMES
U.S. stocks continued last week’s rebound, except for the tech-laden NASDAQ which slipped a bit. The S&P 500, DJIA and Russell 2000 all ended the week positive, as Wall Street closed the books on the week, the month, the quarter and the year. There was not a lot of economic news that pushed markets around, but there was some rebalancing as the quarter and year came to a close. Value outpaced growth names and the mega-caps outperformed the smaller and mid-size names on the week.
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