Get updates on recent capital market data and trends, including possible expectations for future outcomes.
The S&P 500 has lost nearly 16% more than one-third through the year, representing the third-worst beginning to a year on record. In the previous four worst starts (1932, 1970, 1939, and 2020), the index saw a strong return from this point through year-end, averaging nearly 20%. A decline of 20% has occurred 14 times in the history of the S&P 500, with just two (1987 and 1966) not coincident with a recession, per Bloomberg.
Last month, the Federal Reserve kicked off a series of interest rate hikes to get inflation under control. As interest rates rise, the economy is likely to slow down, though healthy GDP growth is still expected in 2022.
With geopolitical risks elevated, many clients may be hesitant about investing outside of the U.S. Mark Hackett, Nationwide’s Chief of Investment Research, discusses why investors should still consider allocating to international markets.
Stock and bond markets turn volatile as the Federal Reserve backs away from quantitative easing.
Volatility remains intense, with the last six trading days showing the two worst sessions since June 2020 and the best move since May 2020. Below the surface of the decline shows more damage, with over half of NASDAQ down more than 50% from their 52-week high. Weak investor sentiment is now clearly impacting flows, with equity funds and ETFs losing assets in four-straight weeks.
Rising interest rates have become a headwind for growth and tech stocks. As yields have climbed, equity valuations have come down from their recent peaks.
