Turn the Page, 2022 Ends Opposite 2021
Concluding the Year:
2022 is in the books and it wasn’t pretty for investors. Both stock and bond volatility rose substantially last year. The Fed induced bear markets in both stocks and bonds and the standard 60/40 portfolio endured its worst annual loss since 1937. The value and price-weighted Dow Jones index was the best-performing broader domestic index but were still down -8.8%.
The technology, multinational, and growth heavier S&P 500 index logged a -19.4% price decline and sustained its first Fed-induced bear in a decade. The tech, growth, and interest rate-sensitive Nasdaq was the worst-performing broad index sustaining declines of over -30%. All three indexes suffered their worst declines since 2008 as the Fed aggressively hiked rates to slow inflation. The latest CPI report showed inflation at 7.1% in November. It is declining quickly using more real-time, shorter time frame metrics. This is below its 40-year high of 9.1% hit in June, but it’s still far above the Fed’s 2% target.
There will be a flood of economic data throughout January for the markets and the Fed to process. This week the ISM manufacturing PMI (Wednesday) is expected to continue to drop and make its second consecutive sub-50 reading since Covid hit in 1h2020. This data has fallen dramatically over the last six months amid slowing production. This is terrible news for the economy. The prices paid index also likely fell for the 9th month in a row which would be good news for continued lower goods inflation.
The Federal Reserve minutes from the December 13-14 meeting will be released Wednesday. This should provide insight into how the Fed views the underlying inflation process.
Notification: The OHFG YouTube channel is currently undergoing some placement modifications. For now, “Stock Talk” can be found by clicking on this link and subscribing to its own content. https://www.youtube.com/@OakHarvestStockTalk. Alternatively, you can type “Stock Talk with Chris” in the YouTube search box, and you should be directed to the new content.
Keeping you Connected to Your Money: What’s stock talk about? An interview with Troy Sharpe.
https://www.youtube.com/watch?v=Ba7BMurPRWI
News or Noise: Moving to bi-monthly release.
Disclosure
This content contains general information and expresses the views of Oak Harvest Investment Services. All data, articles, and information cited are believed to be reliable at the time of creation; however, Oak Harvest does not warrant any information contained herein to be correct, complete, accurate, or timely.
Oak Harvest provides links to content produced by other websites that OHFG does not control, and Oak Harvest does not necessarily approve or endorse such content and does not guarantee its accuracy. Nothing in this content constitutes personalized investment advice. Any charts, indicators, or graphs included or referenced in this content have limitations, and no such material is able, in and of itself, to provide a buy or sell recommendation for any security. Strategies and ideas discussed may not be right for you, and views and opinions expressed may change without notice. The strategies and ideas discussed will not apply to all client accounts or portfolios.
Nothing in this content constitutes a recommendation, or an offer, or a solicitation to buy or sell securities. Oak Harvest makes no assurance as to the accuracy of any forecast or projection made. Not all past forecasts or projections have been accurate. No current or future forecasts and projections are guaranteed to be accurate. And future forecasts may not be as accurate as any forecasts discussed. Indexes like the S&P 500 are not available for direct investment and your results will differ. Past performance is not indicative of future results. Investing involves the risk of loss.
