Take a look at last week’s market recap from Joe Gallemore, CIMA® Partner & Director of Investment Management for Argent Bridge Advisors. Watch the video now!
Stock indexes were effectively flat last week as things cooled off from the market rally we’ve witnessed since mid-March.
2022 has been a difficult year so far. We started at record highs and have seen two sharp declines followed by subsequent rallies. It may feel counter-intuitive that the market would be up during a major world conflict, but since Russia invaded Ukraine the S&P 500 is +5%. This provides some short-term evidence that the major factors driving the market, at least here domestically, are still inflation, interest rates, and the economic disruptions related to Covid.
Bond indexes and most bond strategies have struggled this year with the combination of inflation and the looming rise in interest rates needed to tame that inflation. So, until some uncertainty exits the equity markets, and the Fed is further down its path of rate hikes, bond markets will be sensitive to the language and outlook of the Fed on an almost meeting-by-meeting basis. In periods like this, we look to own flexible bond strategies that can maneuver and hopefully exploit a very dynamic market.
Finally, commodities (as an asset class that benefits from inflation) have continued their run of handsome returns. The Bloomberg Commodities Index posted a return of +25.5% in Q1.