While 2021 ended with strong gains in the S&P 500 and Nasdaq, up +28.7% *and +21.4%* respectively, the first quarter and year-to-date performances of 2022 are markedly different: year-to-date***, the Nasdaq is down 21%*, and the S&P 500 is off 13.5%*. Bonds declined as well: the Barclays US Aggregate Bond Index was down 5.9%.*
Inflation concerns stuck hard as the CPI surged to a 40-year high, hitting 8.5%** at quarter’s end, with the Fed vowing to tame inflation by raising interest rates more aggressively than expected. That, combined with Russia’s full-scale and unforeseen invasion of Ukraine and it’s still unfolding impact on global economic growth, has brought massive and continuing volatility, e.g., in April, the Nasdaq was down a whopping 13%*, the worst performance since the peak of the financial crisis in fall ’08.
Growth-oriented, high valuation tech stocks have been hit hardest, market leaders whose fall as spooked investors while simultaneously providing buying opportunities rarely seen.
While economic growth is slowing from the extreme bounceback seen last year, a re-balancing of supply and demand caused by the economic disruptions of covid containment efforts is underway; and corporate earnings, with 80% of first quarter earnings having been reported, are expected to be up this
year in a healthy 7+%***range.
Unemployment at 3.6%*, continues to decline, with 1.6 jobs open per jobseeker, and is close to the pre-pandemic low of 3.5%*. Consumer and corporate balance sheets are in the best shape in years, and consumer spending continues to be strong with Delta Airlines, for instance, the industry bellwether, reporting the strongest demand in the firm’s history just a few weeks ago.
And despite all the hubbub, interest rates are still not high in absolute terms. As the second quarter begins, the same headwinds of inflation/rate hikes and geopolitical uncertainties will likely continue to preoccupy investors. Until there are clear signs that inflation is peaking, stock market volatility promises to stay high.
At BD8 Capital Partners, our portfolios are well-positioned for the long-term, with investments in well-run companies that are leaders in their industries with long trajectories of growth ahead, whose fundamentals should support stock price appreciation over time, despite near-term uncertainties.
We continue to focus on your financial planning and investment needs and have an audited track record to back up our unwavering commitment to your financial health and well-being.
Please don’t hesitate to contact us with any questions and concerns.
With warmest regards,
BD8 Capital Partners LLC
***Ytd as of 5.2.22
**US Bureau of Labor Statistics
The content of this article is for informational purposes only and should not be considered a recommendation of any particular security, strategy, investment product or investing advice of any kind. There are risks associated with investing, including the entire loss of principal invested. Past performance does not guarantee future results. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions of Spire Wealth Management, LLC, Spire Securities, LLC or its affiliates. Spire Wealth Management, LLC is a Federally Registered Investment Advisory Firm. Securities offered through an affiliated company, Spire Securities, LLC a Registered Broker/Dealer and member FINRA/SIPC.
PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by Spire’s corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of
the person(s) (“intended recipient”) to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution,
copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Spire has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by