September 23, 2022, Weekly Equity Market Recap. The Fed remains engaged in one of the most aggressive rate-hiking cycles in history and that has not only weighed on valuations with downward pressures but has also spiked market volatility. All the major equity indices experienced a fifth negative week in the last six with the S&P 500 dropping 4.7%, the Dow giving up 4.0% and the Nasdaq falling 5.1%. Recent market weakness clearly reflects still-hot inflation and a "don't fight the Fed" marching orders. On Wednesday, the Federal Reserve raised interest rates by another 0.75% while guiding for another 1.25% in hikes over the remaining meetings this year, for November and December. Further, Powell pledged to "keep at it until the job is done," paying homage again to Fed Chair Paul Volcker's memoir, "Keeping at It." The Fed has hiked its policy rate by 300 basis points (bps) this year, including a third 75 bps rate hike delivered this week, and we expect the Fed to reach its "terminal" rate of 4.75-5.00% by February 2023. Brokerage firm Goldman Sachs said it doesn't see the Federal Reserve lowering interest rates before 2024. This overhang adds to existing corporate earnings concerns, particularly lowered expectations and potential missed Q3 earnings targets. The only silver lining is income opportunities are growing as the yield on 10-year U.S. Treasurys jumped above 3.50%, the highest level since 2011.
September 16, 2022, Weekly Equity Market Recap. Dire economic news from the CEO of FedEx, along with a hot Consumer Price Index (CPI) report, drove equity markets down with the largest one-day decline since June of 2020. The market sell-off this week leaves the S&P 500 index just 5.6 percent above the bottom reached in June, marking a weekly loss close to 5 percent. On the week, FedEx expressed grave concerns over the work economy: “We are seeing volume decline in every segment around the world,” and then Subramaniam added, “So we just assume at this point that economic conditions are not going to be good.” Another contributing factor was investors were looking for cooling CPI data in hopes to trigger the Fed to not increase rates at their current pace, but with a surprise uptick, the market turned sharply negative. These challenges added to other lingering worries about supply chains, the war in Ukraine and an emerging energy crisis.
September 16, 2022, Weekly Equity Market Recap. Dire economic news from the CEO of FedEx, along with a hot Consumer Price Index (CPI) report, drove equity markets down with the largest one-day decline since June of 2020. The market sell-off this week leaves the S&P 500 index just 5.6 percent above the bottom reached in June, marking a weekly loss close to 5 percent. On the week, FedEx expressed grave concerns over the work economy: “We are seeing volume decline in every segment around the world,” and then Subramaniam added, “So we just assume at this point that economic conditions are not going to be good.” Another contributing factor was investors were looking for cooling CPI data in hopes to trigger the Fed to not increase rates at their current pace, but with a surprise uptick, the market turned sharply negative. These challenges added to other lingering worries about supply chains, the war in Ukraine and an emerging energy crisis.
September 9, 2022, Weekly Equity Market Recap. The US equity markets posted their first weekly positive returns since mid-August: the Nasdaq jumped 4.1%, the S&P 500 gained 3.6% and Dow advanced 2.7%. Given it was a very light week for economic data, the markets took a breather with a technical bounce. The economic data points continue to demonstrate that the economy remains resilient with job claims lower than expected and ISM Service Index up in August.
September 2, 2022, Weekly Equity Market Recap. Another bear market rally has withered away as major stock averages slide for third week, as the Nasdaq posts six-day losing streak. The S&P 500 rallied 17% from it’s mid-June low through mid-August, offering investors hope that the bottom was in, but then the second half of August ultimately sank the index by -4.2% for the month. On the week, the Dow fell 2.99%, the S&P 500 declined 3.29% and the Nasdaq dropped 4.21%. Now we are heading into September, traditionally one of rockiest months for the stock market. The stock market recovery has been clobbered by new hawkish comments from Federal Reserve officials signaled that interest rate hikes aren’t going away anytime soon. The Fed left no doubt as to why they are on the investment scene today, with a mission to destroy inflation. And for investors, the message is "Don't fight the Fed." The unemployment rate rose to 3.7%, only a mere two-tenths of a percentage point higher than expectations, which did not give much hope that economic frailties will deter the Fed from raising rates this month by 0.75%.
September 2, 2022, Weekly Equity Market Recap. Another bear market rally has withered away as major stock averages slide for third week, as the Nasdaq posts six-day losing streak. The S&P 500 rallied 17% from it’s mid-June low through mid-August, offering investors hope that the bottom was in, but then the second half of August ultimately sank the index by -4.2% for the month. On the week, the Dow fell 2.99%, the S&P 500 declined 3.29% and the Nasdaq dropped 4.21%. Now we are heading into September, traditionally one of rockiest months for the stock market. The stock market recovery has been clobbered by new hawkish comments from Federal Reserve officials signaled that interest rate hikes aren’t going away anytime soon. The Fed left no doubt as to why they are on the investment scene today, with a mission to destroy inflation. And for investors, the message is "Don't fight the Fed." The unemployment rate rose to 3.7%, only a mere two-tenths of a percentage point higher than expectations, which did not give much hope that economic frailties will deter the Fed from raising rates this month by 0.75%.