Earnings and Buy Backs Forthcoming
The overall S&P500 dropped a bit over -2% during last weeks holiday shortened and lower liquidity pre-Easter 3-day weekend. It sits down around -8.5% year to date. The tech heavy NASDAQ dropped almost -4%. Rising long-term Treasury yields, with the 10-year rate reaching 2.85% last week, which directly create rising real estate mortgage rates, have weighed on cyclical equities the most. Technology, consumer discretionary, and residential real estate-oriented stocks have been hurt the most year to date even though end demand has remained strong. Oil prices bounces last week with domestic WTI oil holding near $107 per barrel and natural gas prices sitting around $7 per million BTU (up 100% YTY).
Financial markets have now basically priced in two 50 basis point interest rate hikes at the Federal Reserves next two meetings. (May 4th). This is while the economic data has been peaking and growth moderating. There are currently more downside risks to growth than upside throughout summer. This is seasonally normal. Current economic slowdown causes include, China Covid shutdowns hurting manufacturing; Russian invasion in Ukraine causing European growth to slow and consumer sentiment to tank overseas; and higher commodity prices squeezing consumer demand and corporate profits domestically.
We have attached the Asset Return Quilt, courtesty of Boa, for your review. The only positive returning groups year to date are commodities and gold.
Weekly Stock Talk Podcast: First Quarter 2022 Review
https://www.youtube.com/watch?v=_xQyGKqdd54&list=PLxj0FBH5Bt8twiZx9RvxpW9AydohZ5W3-&index=25
New or Noise: Economic Growth has Peaked-The Bond Market and Yield Curve
https://www.youtube.com/watch?v=EYYsas-FzDI
Oak Harvest YouTube Channel
https://www.youtube.com/channel/UCkLvOm9F5iC01-hHxRmUXpQ
Stock Talk Podcast (Weekly Market News and Opinion from Oak Harvest):
https://oakharvestfg.com/stock-talk-podcast/
The Investor Mindset Podcast (Introduction to Critical Concepts for Investors):
https://oakharvestfg.com/investor-mindset/
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