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.

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Source: eMoney

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.” 

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Source: eMoney

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. 

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.” 

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Source: eMoney

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. 

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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%. 

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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.

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Source: eMoney

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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Source: eMoney

Market Insights - December 24, 2021

MARKETS JUMP HEADING INTO THE CHRISTMAS HOLIDAY AS FEARS OF OMICRON SUBSIDE AND 3Q GDP INCHES HIGHER

U.S. stocks rebounded from the last week’s losses, as Wall Street seemed eager to “buy the dip” as fears of the new omicron variant waned. Volatility peaked Monday late afternoon, but trended down all week as overall trading volumes were low heading into the Christmas holiday, with markets closed on Friday.

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Source: eMoney

Market Insights - December 17, 2021

MARKETS RETREAT AS THREE RATE HIKES IN 2022 ARE MORE LIKELY AND AS PRODUCER PRICES SURGE 9.6% YEAR-OVER-YEAR

Equity markets retreated on the week, driven in part by the expected-tightening-course of the Federal Reserve and fears about how much the omicron variant might lead to lockdowns amidst the holiday season. While the Federal Reserve’s actions were widely anticipated, Wall Street reversed its recent course and sold more of the growth and tech names, thinking that rising rates would eat into future profits of these companies. Accordingly, the growth and tech-laden NASDAQ was hit the worst, dropping 3%, which is roughly 7% off from its recent high.

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Source: eMoney

Market Insights - December 10, 2021

Markets Jump as S&P 500 Notches New Record

If you just read the economic data reports on the week, you might have expected the markets to retreat, but they did everything but retreat as the S&P 500 recorded its best weekly gain since February on its way to a new record high. Many suggest that the markets moved so much because fears over the Omicron variant seemed to dwindle, especially when many of the pharmaceutical companies reported that they believe their vaccines will be effective against this latest variant.

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Source: eMoney

Market Insights - December 3, 2021

It was another volatile week for Wall Street, as the VIX – aptly named the Fear Index – trended up all week and ended at a level not seen since late January of this year.

The markets seemed to struggle with figuring out how the Omicron variant would impact markets and economies and at times it seemed as if the number of naysayers equaled the number of those that weren’t too worried. But when Fed Chair Powell suggested that the word “transitory” was no longer appropriate when discussing inflation, it seemed as if the naysayers gained converts quickly. Especially when Powell suggested that the Fed might accelerate the tapering of its bond purchases at a faster rate than previously discussed. Wall Street analysts are interpreting this acknowledgement as a sign that the Fed’s timeline for increasing short-term rates is sooner than previously thought.

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Source: eMoney

 

 

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