For markets, economies, and geopolitics, 2022 has felt like all bad news.
June 7, 2022
Risk assets slid lower last week as major US retailers Target and Walmart both missed earnings estimates.
Despite a big bounce on Friday, risk assets had another difficult week last week. The latest Consumer Price Index year-over-year increase was released on Wednesday.
It was another busy, and volatile, week in the markets. The US Federal Reserve (Fed) moved forward with the much anticipated 50-bps interest rate hike on Wednesday and equity markets immediately rallied on the news.
April was an abysmal month for most risk assets, with the S&P 500 index (large US companies) declining nearly 9 percent bringing year-to-date losses for the index to almost 13 percent.
Equity markets are once again in correction territory (defined a decline of 10% or more) with some parts of the market, such as technology stocks, officially in a bear market (a decline of 20% or more).
Both equity and fixed income markets continued their downward slide last week. The war in Ukraine continues to drag on, Covid-19 lockdowns in China persist, and Federal Reserve President Powell indicated that a 50-bps interest rate increase is “on the table” at the next meeting.
Last week the equity markets retreated, in general, during the holiday-shortened week. Inflation, the conflict in Ukraine, and the resurgence of Covid-19 all remain issues that are weighing on investors.
After rallying in March, equity markets retreated last week. Investors expressed concern over the Federal Reserve (Fed) meeting minutes released on Wednesday, which communicated plans to reduce their balance sheet (alongside raising interest rates throughout the year).
Since our last monthly update, it’s fair to state that the Russia / Ukraine war and resulting energy and commodity price increases have clouded the outlook for US and global economic growth.