Climbing Higher | June 24, 2022

AUTHOR: Kerry J. Hilsabeck, CFP®
TITLE:    Investment Adviser Representative
TAGS:     Jobs, Goods, Yield Curve, Manufacturing, Services, S&P500

Markets saw some stabilization this week and climbed out of a bear market. Is this a temporary respite or a positive sign of more to come?

Monday   S&P 500 % | NASDAQ %

Markets were closed on Monday.

Tuesday   S&P 500 2.45% | NASDAQ 2.51%

The S&P 500 and Nasdaq jumped at the opening bell following a closed trading day on Monday and it never looked back. Perhaps this is a sign of optimism on taming inflation over the next few months. Housing data showed pain points with Existing Home Sales falling for the 4th straight month.

Wednesday   S&P 500 .13% | NASDAQ .15%

Markets were little changed throughout the day with major indices closing slightly lower. This follows testimony from Chairman Powell assuring the Senate Banking Committee that the economy is strong enough to withstand recent rate hikes. Taming inflation is no easy task, specifically with the target being 2%. All in all, today was a relatively uneventful day with the Volatility Index dropping to 28.95.  

Thursday   S&P 500 .95% | NASDAQ 1.62%

The Nasdaq moved into the positive early while the S&P500 teetered during a 2nd day of Powell testimony. Oil production continued to be top of mind as consideration for a 3-month suspension of the gas tax was proposed. This was met with little optimism of really tempering costs. Overseas, Russia clamped down on natural gas flows to Europe by 60%.

Friday   S&P 500 3.06 % | NASDAQ 3.23%

Markets regained sizable losses following a 3-week skid to close out the week. Key data for today was consumer sentiment hitting an all-time low; however, week-long public comments from officials made it clear inflation was a high priority. With 1 week left in the 2nd quarter, all eyes will be on GDP data in the next week. If production can increase, then there could be additional reason for optimism through the summer.

Conclusion   S&P 500 6.45% | NASDAQ 7.21%

This week took a much different direction than last week and snapped a 3-week decline to close back above the technical bear market threshold (20%). The S&P 500 is down 17.93% YTD following a short week rebound. Valuations and earnings will be key in the next couple of weeks, ultimately shedding light on the health of companies in this hawkish environment.

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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
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