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Bob Carey
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  US Stock Markets Ended May 13, 2022
Posted Under: Weekly Market Commentary
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The S&P 500 Index declined nearly 2.5% for the week although a strong Friday session helped mitigate the pain. Growth stocks continued to pull the market down as inflation and the Fed's anticipated response are at the top of investor's minds. Growth has underperformed value by over 17% year to date in one of the greatest selloffs in high-valuation stocks since the Dot-Com Crisis. The tech-heavy Nasdaq 100 Index came close to eclipsing its maximum drawdown experienced during the Covid-19 pandemic on Thursday. Compared to the current selloff, growth stocks have only experienced equivalent drawdowns three times in the previous three decades; the Dot Com Bubble, the Global Financial Crisis of 2008, and the Covid-19 pandemic. The most significant economic report of the week was the April CPI number which surprised to the upside but showed a slight decrease in inflation from the previous month. After many economists were confident that inflation had peaked in March, the relatively close April number spooked investors with the possibility that inflation could continue to run higher. On Thursday, Jerome Powell was reaffirmed by the Senate for a second four-year term. In his prepared remarks, Powell encouraged Americans that the process of taming inflation down to 2% will require more pain to come but will ultimately be less severe than if no action were taken. The worst performing stock in the S&P 500 was Twitter (TWTR, -18.2%) as the stock plunged on Friday due to a tweet from Elon Musk that he would put the acquisition on hold, citing information found during the due diligence process that could potentially give him the opportunity to renegotiate or break the agreement. The best performing stock in the S&P 500 was Viatris (VTRS, +11.4%) which announced moderate results and benefitted from outperformance from the value-oriented side of Health Care during the week. Retail earnings are on deck in the upcoming week as investors will hear quarterly results from Ross Stores, TJX Companies, Walmart, Target, Home Depot, and Lowe's.
Posted on Monday, May 16, 2022 @ 8:07 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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