Markets “In a Nutshell” for July 25, 2022
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.00%, the S&P 500 was up 2.60%, and the NASDAQ rose 3.30%. Foreign stocks (MSCI EAFE) were also up, rising 3.50%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 2.77%. (Data source: Wall Street Journal)
Equities had a nice week as markets rose between 2 – 3.5% for the week and the S&P 500 is now up 9% over the last month. Equities are still down 17% for the year but we are now well off the lows that we had seen just a month ago. One reason for this rally may be the decline in interest rates as we have seen the 10-year Treasury Yield move from 3.5% down to 2.8%. Looking at a chart, when yields peaked is when stocks bottomed in the past month and the two have been in opposite directions since. While this rally does not put equities in the clear from another downturn, it does show that the market may have been oversold at the time as people have come in and bought equities at these lower levels.
Important Data Coming This Week
This upcoming week could give the market reasons to rally more or it could create more fear and send markets lower. The Fed will meet this week as another round of interest rate hikes is expected. 2nd Quarter GDP is also expected to come out with a reading this upcoming week which will give people an idea of how the overall economy is performing. If we were to see negative GDP growth once again, that would put us in a technical recession with 2 straight quarters of negative GDP growth. Between all the economic data, we also have a busy earnings week which might impact the market the most. If we see companies continue to have strong earnings the market could rally as companies continue to post good numbers.
What was GDP growth for the Unites States in Q1 of 2022? (Scroll Down for Answer)
Have a Great Week!
4) -1.6%. GDP decreased at an annual rate of 1.6% in Q1. Although another negative quarter for GDP would be a technical recession, the National Bureau of Economic Research is the organization that officially states whether or not a recession has occurred or is occurring.