|Stocks posted losses in a holiday-shortened trading week as the first-quarter earnings season kicked off and investors digested new inflation data.The Dow Jones Industrial Average declined 0.78%, while the Standard & Poor’s 500 fell 2.13%. The Nasdaq Composite index dropped 2.63% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.20%.1,2,3|
Stocks began the week moving lower as bond yields climbed higher, with growth stocks suffering some of the steepest declines. Investors considered China’s ongoing lockdown warily, worried it might worsen supply-chain issues.
Historically high consumer and producer price inflation reports were shrugged off by the stock and bond markets in the main, with bond yields slipping despite the hot inflation numbers. Despite an encouraging start to the first-quarter earnings season, stocks pulled back on Friday as bond yields resumed their move higher ahead of a three-day holiday weekend.
An Eye on Inflation
On Tuesday, March’s Consumer Price Index (CPI) report offered little indication that inflation may be moderating, as prices increased 8.5% year-over-year, the fastest pace in 40 years. Core inflation, excluding food and energy prices, recorded a 6.5% jump, the steepest rise since August 1982. One encouraging note was that core inflation showed potential signs of ebbing, posting a monthly increase of 0.3% versus expectations of a 0.5% increase.4
The following day, March’s Producer Price Index, a potential insight into future inflation, rose 11.2% year-over-year. A March survey by the National Federation of Independent Business released earlier in the week, indicated that half of the respondents were likely to raise prices in the next three months.5
This Week: Key Economic Data
Tuesday: Housing Starts.
Wednesday: Existing Home Sales.
Thursday: Jobless Claims. Index of Leading Economic Indicators.
Friday: Purchasing Managers’ Index (PMI) Composite Flash.
Source: Econoday, April 14, 2022
This Week: Companies Reporting Earnings
Monday: Bank of America Corporation (BAC), J.B. Hunt Transport Services, Inc. (JBHT).
Tuesday: Netflix, Inc. (NFLX), Johnson & Johnson (JNJ), International Business Machines Corporation (IBM), Lockheed Martin Corporation (LMT), Prologis, Inc. (PLD).
Wednesday: Tesla, Inc. (TSLA), The Procter & Gamble Company (PG), Lam Research Corporation (LRCX), CSX Corporation (CSX).
Thursday: AT&T, Inc. (T), United Airlines Holdings, Inc. (UAL), Snap, Inc. (SNAP), Blackstone, Inc. (BX), Union Pacific Corporation (UNP), Dow, Inc. (DOW).
Friday: Verizon Communications, Inc. (VZ), American Express Company (AXP), KimberlyClark Corporation (KMB).
Source: Zacks, April 14, 2022
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|If you’re concerned about today’s market volatility, you might take some comfort from one of my favorite quotes by Warren Buffett.|
“I would tell them don’t watch the market closely,” said the Oracle of Omaha.
Buffett’s quote was from 2016 when the markets were wrestling with Brexit, China’s economy, and, coincidentally, the Federal Reserve’s interest rate policy.
Fast forward to 2022, and rising bond yields, Federal Reserve uncertainty, and escalating tensions on the Ukrainian-Russian border all have taken turns rattling the markets.
Markets move in cycles, but after a period of solid performance like 2021, it’s easy to forget that pullbacks, corrections, and even bear markets happen from time to time. Some market watchers would even suggest down cycles are healthy in the long run.
But if you find yourself thinking, “this time, it’s different,” we should talk. Downtrends can be unnerving, and sometimes, they may cause you to rethink how you feel about market risk.
|The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.|
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2022 FMG Suite.
|Recently, the world has watched with great interest as a few companies have seen surprising rallies in their stock prices. You may have read stories of individual investors gaining massive returns on their investments, thanks to this phenomenon. However, many of these same assets have quickly suffered steep declines following their initial boost.1|
During times like these, it can be tempting to pile into an asset that has seen such rapid growth. The excitement of the moment or the fear of missing out can cause even the savviest investor to act when they usually wouldn’t.
But what matters is what you do next. Right now, perhaps the best thing for your long-term future is to remove emotion from the equation. Remember, your investment strategy has been crafted to help pursue your long-term goals, regardless of what markets do in the short-term.
Volatile markets can be unnerving, but you’re always welcome to give me a call with your questions. Rest assured, we’re keeping a close eye on the markets, and most importantly, watching for any new long-term trends that may emerge on your behalf.
|1. CNBC.com, February 1, 2021|
|The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for gen|