JULY 2022
Of course, investors are paying attention to how their portfolios are responding to inflation and rising interest rates. However, we believe the U.S. economy continues to show positive economic growth—this should allow stock prices to eventually stabilize. Our first article highlights what investors should focus on right now. Give us a call if you would like to discuss your financial situation in more detail.
Join us on August 3, at 12:00pm EST for a virtual seminar “Sustainability: Why Now?” to learn how incorporating an ESG lens into investment decisions can help to identify potential opportunities and risks that may not be addressed through traditional financial analysis. Register Here: www.janney.com/ESGSeminar
US retirees have some advice for their younger selves, and by extension anyone who has yet to retire: Save more. Save earlier. Make a financial plan for retirement. And don't forget to account for taxes and inflation -- they'll hit you harder than you expect. Those are key takeaways from a survey of more than 1,100 US retirees by the Employee Benefits Research Institute, which was conducted this spring. Our second article reviews these recommendations to consider that may prompt you to call us to discuss additional options for your retirement planning.
This month's "What's Happening Now" section shares interesting stories on the hotbed of contemporary architecture in the Rocky Mountains, things nobody tells you about buying a house near the beach, and how to create a retirement home on a boat.
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What should investors focus on right now?
Of course, investors are paying attention to how their portfolios are responding to inflation and rising interest rates. However, we believe the U.S. economy continues to show positive economic growth—this should allow stock prices to eventually stabilize.
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What today's retirees want future retirees to know
US retirees have some advice for their younger selves, and by extension anyone who has yet to retire: Save more. Save earlier. Make a financial plan for retirement. And don't forget to account for taxes and inflation -- they'll hit you harder than you expect.
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Market Update
For the first time since 2015, each of the benchmark indexes lost value for two consecutive quarters. They also posted losses for June, marking three consecutive down months for the tech-heavy Nasdaq, its longest losing streak since 2015. Investors watched for signs of an economic deceleration in the U.S., with inflation continuing to run at multi-decade highs, and monetary policymakers maintaining a firm stance that their priority remains bringing down prices even if it means slowing economic growth. Nevertheless, Wall Street has suffered one of its worst six-month stretches in decades. The S&P 500 is poised for its worst first half since 1962. Ten-year Treasury yields climbed from 2.37% at the beginning of the quarter to over 3.00%. The dollar is on pace for its best quarter since 2016.
Consumer spending slowed for the first time this year, possibly indicating that the economy is indeed weakening. Consumer sentiment fell to its lowest level since 2021. Crude oil prices rose marginally in the quarter, spiking at $123.18 per barrel in early June, ultimately settling at around $105.00 by the end of the quarter. Gold prices declined each month of the quarter as investors weighed rising interest rates against fears of a recession. According to AAA, as of June 30, the average price for regular gasoline was $4.857 per gallon, $0.90 less than the previous week but $1.80 per gallon more than than a year ago. As prices for crude oil and gasoline increased, demand waned, helping to pull prices lower. In addition, OPEC+ agreed to increase output in July and August to compensate for the drop in production due to the sanctions placed on Russia.
Equities fell sharply in April as some disappointing earnings data from several mega-cap companies added to investor worries about rising inflation, the war in Ukraine, and the possibility of an economic pullback. The Nasdaq dropped the most since October 2008, falling nearly 24.0% from its peak as it entered bear territory. The S&P 500 notched its worst month since the beginning of the pandemic, dragged lower by heavy losses in communication services, consumer discretionary, and information technology. Bond prices also lagged as yields increased in anticipation of rising interest rates as part of the Federal Reserve's plan to quell inflation. While consumers worried about cost containment and its impact on the economy, one factor helping to drive inflation higher was strong wage growth propelled by a tight labor market. Weekly jobless claims fell to their lowest level since 1970, while the unemployment rate dropped to a pre-pandemic 3.6%. Entering May, Americans remained focused on rising inflation, the ongoing war in Ukraine, lockdowns in China due to rising COVID numbers, and the impact of the Fed's program of fiscal tightening.
May proved to be a month of market swings. Equities lost value for the first three weeks of the month. However, a late rally helped the benchmark indexes close the month relatively flat, with the exception being the tech-heavy Nasdaq, which followed April's sharp declines by falling another 2.0%. Early in the month the Federal Reserve raised interest rates 50 basis points and announced plans to start reducing its balance sheet in June. The Fed's hawkish pronouncements in its effort to curb rising inflation spurred worries of a recession, despite solid economic data from the prior month.
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Chornyak & Associates Financial Planning Consultants
at Janney Montgomery Scott
716 Mt. Airyshire Boulevard, Suite 200, Columbus, Ohio 43235
Janney Montgomery Scott LLC Financial Advisors are available to discuss all considerations and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Market Update Prepared by Broadridge Advisor Solutions.
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Janney Montgomery Scott LLC • Member: FINRA, NYSE, SIPC
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