Is Big Tech’s dominance over?
Surging tech stocks drove returns during the pandemic, but rising interest rates may pressure their earnings.
Markets and Economy
Nationwide’s Chief of Investment Research and the Nationwide Economics team offer daily and weekly commentary and analysis of the equity and bond markets, including an overview of economic data being released, global market news, commodities and market performance by index returns. These timely insights can help you navigate markets and understand emerging trends.
Job market remains resilient as activity weakens across the economy
Consumer activity slowed sharply over the last two months of 2022, suggesting little momentum entering the new year. Still, job gains remain solid as many businesses have yet to significantly slow hiring even as clouds build on the horizon. The strength of the job market should keep the economy from dipping into a recession in the near term; but job losses are likely later this year as still high input costs and reduced demand for their goods and services sap firms' profits. Should labor conditions finally show some cracks, we expect the economy to contract by mid-year. That said, we foresee only a moderate and short-lived recession as relatively healthy balance sheets for most households and businesses buffer the downturn.
Rally continues as investors hope for a soft landing
Technical indicators are increasingly supportive, as the S&P 500 has been above the 200-day moving average for a week, and the 50-day moving average will likely break above the 200-day moving average (“golden cross”) for the first time since last March in the next few days. Institutional investors and hedge funds remain conservatively positioned, and money market assets are at record levels. Wall Street strategists are also notably bearish, with the average estimate for the year-end S&P 500 below the current level, indicating that those numbers could be revised higher, the market is ahead of itself, or a combination of the two.
GDP details show waning momentum for 2023: Weekly Economic Review & Outlook
Headline real GDP growth remained solid in the fourth quarter underpinning a rebound in the second half of 2022 that more than recovered the decline recorded in the first half of the year. Unfortunately, the underlying details of the GDP report were less impressive, showing that consumer and business spending was slowing heading into the new year. In positive news, the PCE price data for December were encouraging, but inflation remains far above the Fed's 2 percent target.
Podcast: GDP growth ended 2022 with an unhealthy mix
What does Q4's GDP report tell us about the state of our economy as 2022 came to an end? What impact has the Fed's rate hikes had on GDP? How does this report impact our outlook of the economy and financial markets—and the potential for a recession?
A good time for a risk check-up
After a difficult year in the markets, now is a good time to re-align your portfolio with your risk tolerance.
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