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US Stock Markets Ended June 10, 2022
The S&P 500 Index declined another 5% last week to mark the ninth week in the last ten to see a decline. The market barometer has drawn down over 18% from all-time highs, within striking distance of the 20% drawdown mark that indicates a bear market. Equities sold off near the end of Thursday and throughout Friday as the May CPI number surprised to the upside. The 8.6% reading was a new high for this cycle and showed that inflation did not peak in March. Although prices continue to rise above-trend, the labor market remains strong as nonfarm payrolls in May of 390,000 beat the estimate of 318,000 and reaffirm a strong backdrop for the Fed to raise rates against. Gasoline made up a large part of the month to month rise in prices as the national average price of gasoline rose above $5/gallon this week and oil eclipsed $120/barrel for the first time since the initial spike in March when Russia invaded Ukraine. Energy stocks performed the best during the week although all eleven GICS sectors finished the week down, led by Financials and Information Technology. Solar stocks reacted positively to news on Monday that President Biden will waive tariffs on solar panels from Southeast Asia for another two years as he seeks to implement his clean energy plan. Solar stocks had previously been weighed down by the overhanging grey cloud of a federal probe into whether Chinese companies were sidestepping tariffs by exporting to the US through Southeast Asian intermediaries. Cruise line stocks could find no respite from the newly announced CDC guidelines that no longer require a negative test before re-entering the US as Royal Caribbean Cruises (RCL, -18.8%), Carnival Corp (CCL, -18.2%), and Norwegian Cruise Line Holdings (NCLH, -15.8%) were the worst performers in the S&P 500 index during the week. The best performing stocks in the S&P 500 during the week were the JM Smucker Co. (SJM, +4.6%) and Valero Energy Corp (VLO, +3.8%). The upcoming week holds another Fed meeting on Wednesday where investors are pricing in at least a 50bps rate hike with a 27% chance of a 75bps hike.
Monday, June 13, 2022 @ 9:13 AM
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.