April 29, 2022
Good morning,
April ends today; thank God! The first quarter of this year was horrible, one of the worst of its kind, ever. Then April comes along, and it was worse. Most of the major indexes were down in April more than they were for the whole first quarter. Bonds? – Fuggedaboudit, it’s been the same there as in equities. There has been no place to hide.
Index April YTD
S&P -5.36% -10.04% U.S. Large Cap
NASDAQ -9.49% -17.73% Tech/Large Cap Growth
Russell 2000 -7.35% -14.58% Small Cap / Value
EAFE -6.08% -12.97% Int’l Developed
EM -5.62% -12.53% Emerging Markets
U.S. Agg -3.30% -9.04% Aggregate of U.S. Bond Market
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Bloomberg
In Wednesday’s note, we talked about the likelihood that equities would languish into the summer from a technical perspective. However, stocks do not usually suffer major bear markets when the economy is not headed into a recession. Thus far, most leading indicators continue to show the economy is still rising. Yes, there are some negative offsets to the positive PMI data, namely inflation and higher rates. Inflation and higher rates are the likely culprits behind the YTD column above. Economy slowing? – certainly. Going into a recession? – the data suggests not, and is still colored unlikely. A bear market defined as a 20%+ decline – again, not likely without a recession.
Have a good weekend
Be well,
Mike