Markets “In a Nutshell” for June 21, 2022
Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 4.80%, the S&P 500 was down 5.80%, and the NASDAQ fell 4.80%. Foreign stocks (MSCI EAFE) were up, rising 2.00%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 3.23%. (Data source: Wall Street Journal)
Fed Raises Rates
The Fed raised rates as expected last week, except this time it was a 0.75% rate hike. The Fed had been expected to raise rates by 0.50% but then expectations shifted as reports came out of an expected 0.75% rate hike. This was the largest rate hike since 1994 and shows the Fed’s worry that inflation is out of control and needs to be slowed. The market moved a little on this news but the rate hike was already priced in and many people think in the long run these rate hikes are what is best for the market. The next meeting will be in late July and many people will be paying close attention to see if the Fed needs to go bigger in their rate hikes or if they are finally seeing inflation slow down.
Market Struggles Continue
Once again, markets moved substantially lower last week as the S&P 500 is now down 22.9% for the year and in a bear market. While bear markets are not uncommon as they happen about once every 3.6 years, they are not fun to go through. The average bear market sees markets decline 37.3% and last a little over 9 months. So we may see more downside before it’s over, and trying to time the bottom is generally not a good idea. When trying to time the market many investors end up selling at the bottom and waiting to buy, missing out on gains as the market eventually moved higher. Usually the best thing to do during a down market is stick to your plan, and possibly consider buying more securities as they go “on-sale” from their higher prices.
How many days a year is the stock market closed for US holidays? (Scroll Down for Answer)
Have a Great Week!
1. 10, The stock market is closed for 10 holidays in 2022, the newest being Juneteenth which is being observed on June 20th for the first time.