Last week stocks recorded a second week of pronounced losses after Federal Reserve policymakers revealed that they expected official short-term interest rates to continue going sharply higher over the next several months. The Dow Jones Industrial Average and S&P 400 Midcap Index fell to new intraday lows in late 2020, while the S&P 500 Index, small-cap Russell 2000 Index and Nasdaq Composite managed to stay slightly above their bottoms in mid-June 2022.
Last week, stocks fell sharply as inflation fears intensified and short-term bond yields reached levels last seen in 2007. The S&P 500 Index recorded its most significant weekly drop since mid-June and hit its lowest point on an intraday basis since mid-July. Growth stocks fared worst, with the technology-heavy Nasdaq Composite falling nearly 5.5%. Communication services and information technology shares led the declines within the S&P 500 as Google parent Alphabet and Facebook parent Meta Platforms hit new 52-week lows. Industrials and materials shares were also fragile.
Last week stocks broke a string of three weekly losses as investors appeared to grow more confident that the market had reached at least a temporary bottom after surrendering about half of its summer rally.
The news – coming at us from every channel, broadcast, blog, or tweet – can sound scary and grim. Inflation, potential recession, rapidly rising interest rates, the wildly gyrating stock market … It’s enough to make us want to tune out the news completely or throw our investment statements in the shredder unopened.
Global Equities sunk 3.68%% in August on fears of more aggressive interest rate hikes by central banks in their fight against soaring global inflation. The MSCI All-Country World Index is off 17.75% YTD, its worst eight-month start to a year since its inception. Global bonds were unable to provide reprieve, as the Bloomberg US Aggregate Bond and International Bond indexes fell 2.83% and 3.46% respectively this month and they too are off to their worst start in their index histories with YTD returns of negative 10.75% and 10.21% respectively.
Last Week In ReviewLast week stocks finished lower as investors continued to digest the implications of hawkish messages from Federal Reserve officials. The S&P 500 Index extended the daily losing streak that began with Fed Chair Jerome Powell’s August 26 speech...