S&P 500 closes the book on its steepest first-half slide since 1970

What a shellacking, the Dow opened some 600 points down but slowly recovered to regain all but 50 points by 2 pm but then fell again to close down 253.  This was to be expected as on this final day of Q2 all the indexes were looking at their worst first-half losses in many years, the S&P since 1970, the Nasdaq since ever, the Dow since 1962.  As today’s expert summed it, “All year it’s been a tug of war between inflation and slowing growth, balancing tightening financial conditions to address inflation concerns but to avoid outright panic.”  And on a much more dire note, “We are more than likely already in a recession. The only question is how harsh will it be?”  

S&P 500 limps to slightly lower close as quarter-end looms

It was a seesaw day with the Dow whipping back and forth several times between 50 points down and about 200 up before settling at close 82 up.  Today’s trading reflected after substantial seesaw action on all the indexes the Dow making a modest gain and the Nasdaq and S&P near break-even. But the larger picture for the quarter and the year is dismal with the S&P heading for its biggest first-half drop since 1970, the Nasdaq its biggest in history and the Dow its biggest since the financial crisis. All three having two quarterly declines is a first in seven years. 

Wall Street stumbles as consumer pessimism stokes growth fears

The Dow was up nearly 350 points right out the gate but quickly began a decline with new consumer confidence data released that was sufficiently weak that it once again began to stoke recession fears as the key components of the report from the Conference Board were at levels that often precede recession.  So there was once again a sharp selloff putting both the Dow and Nasdaq at triple digit losses. But not to worry too much as experts pointed out that the selling spree was also strongly influenced by quarter-end portfolio rebalancing so was largely skewed. And yet it was very curious that just yesterday confidence was so high due to several positive data points and today it was all dashed by another not so glowing confidence report. Volume was below average at 11.5 billion. 

Wall Street ends down, pulled lower by growth stocks

The Dow up almost 100 around 11 a.m., then down about 150 by 2 p.m. to rise again to close 62 down.  Much of this choppiness was due to a lack of direction until Q2 reporting starts but for now all three indexes are headed for two straight quarterly declines for the first time in seven years and especially bad for the S&P seeing its fifth worst YTD decline in 60 years.  There is however a considerable bright spot for the S&P.  Every single year that the index has fallen in Q1 and Q2, it has always sprung back to break-even by the end of Q4. No guarantees, but now’s probably a good time to buy the S&P.  Other good news is that orders for durable goods and new home sales beat expectations, which validates Powell’s statements that the economy is robust enough to avoid recession while the Fed reins in inflation.  Volume was below average at 10.9 billion. 

Crypto Future

Crypto is something I still do not understand and given that the first rule of investing is never to do anything you don't understand, I won't touch crypto with a ten foot pole.  This seems particularly wise given the enormous bath the commodity has recently taken.  However, for those of you who are interested, this week's edition of the PBS program WealthTrack provides an update on the current status of cryptocurrency.  Enjoy.  And hope everyone enjoyed their weekend.  

10 of the Best Stocks to Buy for 2022

With the exception of this past week, the market has taken quite a drubbing this month.  So this week's edition of U.S. News Invested gives us the good news that there are still some good stocks out there worth looking at.  Enjoy the weekend.  

Wall Street mints big gains to end strong week

To end the week all the indexes saw another huge rally, for the S&P at over 3% the biggest one day rise in two years.  Why? Part of it is just sellers exhaustion or what might be a relief rally. But a bigger part is the latest from the futures traders pricing in on Friday a March rate of 3.5% vs the previous 4 percent. That combined with business slowing, inflation modestly moderating and a sharp decline in commodity prices produced an expectation of fewer future rate hikes. The Fed’s moves to fight inflation thus far seem to be working and has boosted confidence in a positive outcome.  

Wall Street posts solid gains, as defensives, tech shine

The Dow started the day some 200 points up and that lasted until about 11 a.m. when it started a steady and steep decline, losing about 400 points by 1 pm, then started a resurgence to break even around 2:30 and then gain 194 by close. So why all this volatility again?  It was same old same old or, as today’s expert put it, “There is a tremendous amount of uncertainty about the outlook and so the market is confused.”  For the second day, Powell assured the Congress that the Fed commitment to fight inflation is “unconditional” but today’s reports showed slowing business activity due to declining consumer confidence dampening demand. 

Wall Street ends lower after Powell remarks, as energy shares drag

The Dow opened way down almost 500 points before Powell’s remarks of being “strongly committed” to bringing down inflation gave it a boost until the market was up some 250 points by 2 pm, (a 750 point rally) only to fall again and close almost even, down just 47.  The consensus is the difficulty in assessing how far stocks could fall but there are indications out there that we are approaching a bottom though, as today’s expert put it, “Certainly we are not out of the woods yet.”  This was demonstrated by the defensive sectors being the top gainers. Volume was just a little below average at 12.2 billion. 

Wall Street gains over 2% in broad rebound

Are investors really afraid of inflation and recession?  It’s really hard to pinpoint that one when they sell off one day on fears of recession but then buy on the dip like crazy the next day?  Are these legit fears or are they just bargain hunting?  Today’s expert summed it up, “Do I think we have hit bottom?  No.  But it is a good sign to see investor interest.”  All eyes now are on Powell’s testimony on Wednesday for clues on future hikes and views on the state of the economy.  Goldman Sachs has now doubled its recession prediction for the next year from 15% to 30%.  Volume was in line with recent averages at 12.4 billion. 

Will These Discount Retailers Beat Inflation?

Considering the current economic environment and to close out this holiday weekend, last week's AAII post on Investing Ideas was all about how to profit from this extraordinary inflation by investing in discount retailers, along with a complete analysis of the top discount retailers that are out there.  Hope everyone enjoyed the holiday and are braced for the big heat that starts on Tuesday.  

Great Bond Investor

A 75 basis point rate hike, the largest since 1994 by the Fed this week.  Doesn't that make this a great time to be thinking about bonds again?  That's exactly what Consuelo Mack does in this week's edition of the PBS WealthTrack program in which she interviews one of the industry's most successful bond investors, Mary Ellen Stanek of Baird Advisors.  Hope everyone had a great weekend.  We're heading for some more big heat starting Tuesday.  

The Fed's Rising Expectations for Interest Rates

Given the events of this past week and the general dousing the market has taken so far this month, this latest AAII update addressing the Fed's interest rate strategy seemed particularly relevant and timely.  Enjoy and enjoy the beautiful weekend.  The heat is coming.  

Wall St ends up but still down on week as volatility rules

The Dow was down around 300 about 11 a.m.then up-down up- down to reach a height around +250 about 3 pm, then down again to lose it all and close a modest 38 down. So at least it wasn’t another rout.  After a rocky a.m. start, both the S&P and Nasdaq had a mostly upward trajectory to end the day in the black, the Nasdaq being the big winner at a gain of 152.  Thus ends three consecutive weeks of falling indexes and this week the worst percentage drop since March 2020, the height of the pandemic plunge. It all boils down to volatility brought on by the Fed decision to front-load the rate hikes, an intentional move designed to stem inflation while avoiding recession. 

Wall Street plunges as recession fears grow

So the Swiss and Brits decided to take their lead from the Fed today and do their own rate hikes to rein in inflation in Europe. You’d think this would be good news but apparently Wall Street doesn’t have much confidence that they will succeed like they hope the Fed will but instead will spark a global slowdown in growth and a recession.  So all three indexes were straight down right out the gate and stayed that way all day ending with another round of precipitous declines across the board. The move also triggered fading hopes for Fed success and now a forecast for a 50% or greater chance of recession.  The S&P is now down 23% and the Dow not too far behind. The VIX is at 35 but experts believe we may see a bottom once it hits 40.  Volume remains above average at just under 14 billion. 

Wall Street rallies to close higher after Fed statement

Yesterday it was pretty much a given that there would be a rally today if the Fed delivered the hoped-for ¾ point rate hike that the market wanted. And that’s exactly what happened. But that didn’t stop it from being another crazy day with the Dow up almost 400 points at 10 a.m., then sliding to an almost 200 point loss by around 2:30 p.m.  It must have been right around 2:30 that Powell issued his statement that he expected another ¾ point hike in July but that such actions would not become common and then the market shot way up again over 750 points by 3:30 only to fall again to close up 303 points. 

S&P 500 dips with Fed policy announcement on tap

The Dow was up some 175 points at 10 a.m. before beginning once again a steady decline leading to nearly a 500 point drawdown by 3 pm and then suddenly recovering in the final hour to close down just 151.  Given the fact that just one week ago the gurus were pricing in just a 4% chance of a ¾ point rate hike on Wednesday and by Tuesday that was up to 90% points to increasing confidence in that final hour that the Fed will deliver a favorable verdict tomorrow and put minds more at ease about inflation and recession.  If so, there’ll be a rally; if not, another sell off.  Tuesday’s PPI data showed that inflation was slightly better than expected but still way too high, especially for gasoline. So everyone’s hoping for a ¾ point hike Wednesday as a demonstration that the Fed is indeed serious about taming inflation. Volume remains elevated at 12.5 billion. 

S&P 500 confirms bear market as recession worry grows

It was the third consecutive day of a major rout that began Thursday as investors braced for a bad inflation report and then went into hyperdrive on Friday when the report came in even worse than feared, in fact much worse than feared. Today saw continued fallout from Friday’s panic with the S&P finally falling into bear territory after weeks of flirting with it, and the Nasdaq confirming the bear months ago.  So the Dow is the lone holdout, though it’s going fast having lost about 2500 points in the last three sessions.  But today’s expert tried to stay positive, “The silver lining in all of this is that the more pessimism that abounds, the more potential there is for upside.”  

The True Meaning of Wealth

Given the shellacking the market took at the end of last week, I thought I would end the weekend with some consoling thoughts about what true wealth really means.  Thus, from Benjamin Franklin to Jonathan Swift, here are 15 meditations on the true meaning of wealth. Hope everyone had a great weekend.  

7 Stocks That Soar in a Recession

Given the beating the markets took on Thursday and Friday which has in turned heightened recession fears, I thought this would be a good time to resurrect this April article about the 7 best stocks to have in a recession.  Keep enjoying the weekend.  The heat is coming.  

Wall St suffers biggest weekly loss since January after hot CPI data

The CPI report must have been released fairly early because it was just a calamitous straight shot down right out the gate and it stayed that way all day for all three indexes to have their greatest weekly loss since January. You can guess that the report was not at all good. Economists had forecasted that the increase in inflation in May would be double that of April; instead it was triple. The forecast was for a 0.7% increase (vs April 0.3%) for May and instead it came in at a whopping 1%, nearly 50% above the estimate. Year-on-year CPI went to 8.6% in May, the biggest in 41 years, following 8.3% in April. So inflation, which was expected to be pretty bad, turned out to be much worse thereby extinguishing hopes for a pause in rate increases in the fall.  The S&P is down 18.2% for the year, 5% of that just this week.  With fears of more rate hikes also came fears of recession.  After going a while of volume being below recent averages, today it was above at 12.6 billion. 

Wall St drops as investor jitters climb before CPI data Friday

The indexes were all running pretty close to break-even until about 1 pm when suddenly there was a precipitous drop that took them all down wildly, the Dow a whopping 638 points.  All of this is a reaction to tomorrow’s consumer prices report as sort of a preemptive strike fearing inflation will be shown as even worse than expected. But as today’s expert put it, “If the total is high and the core number shows some sort of drop, I actually think the markets could rally.”  It is expected that the data will show that inflation remains elevated but that energy and food may have dropped a little.  If the readings are higher than expected, it would trigger more fears of more aggressive rate hikes than are currently priced in.  Volume remains a little below average at 11.5 billion. 

Wall Street falls with U.S. Treasury yields above 3%

The Dow and other indexes opened down this morning and stayed down until about noon, but not by much, the Dow only about 40 points.  Then whoosh, a sharp turn down for the entire afternoon when the 10-year note rose above 3% psychologically representing the damaging effects of inflation. All eyes will be on Friday’s consumer price data which is expected to show that inflation remains elevated but also that the two crucial sectors – energy and groceries – to be ticking down. The market is expecting ½ point rate hikes in June, July and September.  Volume remains considerably below recent averages at just over 10.6 billion. 

Wall St jumps with tech, energy; Target news weighs on retailers

The Dow opened almost 300 points down before steadily gaining throughout the session to finally close up 264, or a range today of some 550 points. Everything was nicely summed up by today’s expert, “We’ve had a nice bounce … and in general investors are feeling better right now. – At some point we will put in a bottom, and the market will move higher. We have a hard time believing that’s any time soon.”  The good news is that the CPI report due Friday is expected to show that inflation remained elevated in May but ironically food and energy, the core sectors, are expected to have ticked down.  Volume remains below average at just under 10.4 billion. 

Wall St ends up with growth stocks, but inflation fears linger

Dow up nearly 350 points in the morning. Then it was a choppy trail down for all the indexes with the Dow and S&P barely breaking even. This was in the wake of Friday’s solid jobs report dimming optimism for a pause in the rate hikes and thus putting the focus back on inflation. Sentiment today seems, as expressed by today’s expert, “maybe that peak of inflation is still in that ethereal future.” Volume remains below average at 10.6 billion. 

Closer To The End Than The Beginning?

From our friends at Heritage Capital Research, here's a pretty good analysis of why we're closer to the end of this downturn than to the beginning?  I thought we could end this first weekend of June on a positive note.  Everyone have a good week.  

7 Low-Risk Dividend Stocks to Buy for a Choppy Market

For these turbulent times, this recent issue of U.S. News Invested delivers some useful suggestions for investing in a volatile market.  What's more, they're all solid picks that would work quite well even in a steady market.  Enjoy the weekend.  

Wall St ends down with strong jobs data keeping the pressure on for rate hikes

65,000 more jobs were created last month than estimated which once again stoked fears of more inflation and more expectation that there would be no autumn pause in Fed tightening. Thus it was a straight shot down from early morning on and stayed that way all day. This is yet another example of good news being taken as bad news since the jobs report showed on the one hand that the economy was in fairly good shape but also emphasized the market’s greater fear of more rate hikes.  The solid economy is a double-edged sword. All three indexes fell by about 1% for the week after rising sharply last week.  Though all data says that inflation has peaked, as today’s expert put it, “The peak is less relevant than the staying power of inflation and elevated rates.”  The good news is that wage growth fell but any wage growth means inflation will be around longer than expected, perhaps much longer. Trading was quite light and well below recent averages at 9.4 billion. 

Wall Street ends sharply higher, led by Tesla and Nvidia

The day started 300 points down on the Dow but after 10 a.m. it was a straight up trajectory to end the day with a whopping 435 point gain, which means the trajectory for the entire day was some 735 points. Everyone is trying to figure out whether the worst of the great 2022 selloff is over. Today’s Fed Vice Chair lent a little encouragement in backing two more ½ point rate hikes in June and July but no pause in September unless inflation has cooled.  This was slightly better than yesterday’s Fed governor who wanted monthly rate hikes until further notice. With its recent gains, the S&P is now down just 13% from its January high and a marked decrease in payrolls suggests that labor demand is finally starting to slow which is good news for inflation. But the government’s labor report due on Friday will tell the larger story with a forecast for 325,000 new jobs. Volume was much lighter than usual at 10.7 billion. 

Wall St ends lower as economic data fails to ease rate hike angst

Another wild ride with the Dow down some 400 by noon, then recovered to almost breakeven by 3:30 only to slide again almost 200 by close. It was the same pattern in the other indexes.  Today a slew of less than positive data showed that inflation remains uncomfortably high but manufacturing is up as consumer demand remains strong thereby allaying recession concerns. Other good news is that in most regions of the U.S. the economy was expanding showing that the Fed’s efforts were having an impact. Still, the expectation is that the market will continue to trade sideways until inflation slows a lot more and there are currently no signs on the horizon that that’s coming anytime soon.  Thus the 400 point dives followed by 400 point rallies on the same day. Jamie Dimon was particularly pessimistic today predicting that the economy ain’t seen nothing yet and is heading for a “hurricane” down the road.  Volume was below average at 11.4 billion.