WEEKLY MARKET UPDATE
June 13, 2022
A higher-than-expected inflation report triggered a sell-off on Friday, leaving stocks in the red for the week.

The Dow Jones Industrial Average lost 4.58%, while the Standard & Poor’s 500 dropped 5.05%. The Nasdaq Composite index slid 5.60% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 1.81%.1,2,3
Inflation Upends Stocks
Stocks gyrated between gains and losses last week until sliding lower on Friday’s hot inflation report, which heightened worries over a more aggressive Fed and a further economic slowdown. Stocks moved higher to begin the week, despite rising bond yields, a profit warning from a major retailer, and Senate testimony by Secretary of Treasury Janet Yellen, who said that inflation was likely to remain elevated.

Stocks turned lower later in the week on renewed concerns of an economic slowdown, sparked by a downward revision in The Federal Reserve-Atlanta’s real-time estimate of second-quarter GDP growth and a drop in new mortgage applications. Investors lightening up on stocks ahead of Friday’s inflation report may have also contributed to Thursday’s selling.

Inside Inflation 
Consumer prices rose 8.6% year-over-year in May, marking the highest rate since December 1981. Price increases over the last 12 months were driven by a 34.6% jump in energy prices and by food costs, which climbed 10.1%. Used car and truck prices, which had seen three straight months of declines, rose 1.8% from April, while airfares soared 12.6% in May.4

May’s inflation exceeded economists’ forecasts and dashed the hopes that inflation had plateaued. In a separate economic report on Friday, real wages (net of inflation) fell 0.6% in April and were lower by 3% from 12 months ago.5

This Week: Key Economic Data
Tuesday: Producer Price Index.
Wednesday: Retail Sales. FOMC Announcement.
Thursday: Jobless Claims. Housing Starts.
Friday: Industrial Production. Index of Leading Economic Indicators.
Source: Econoday, June 10, 2022 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings
Thursday: Adobe, Inc. (ADBE), The Kroger Co. (KR).
Source: Zacks, June 10, 2022 Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Food For Thought
"To look back is to relax one's vigil." 
– Bette Davis

Tax Tips
A Checklist of Common Errors When Preparing Your Tax Return
Properly preparing your tax return can be tricky, but here are some tips to help you avoid common errors:
 
  • Submitting your tax return online ensures greater accuracy than mailing it in. The e-file system can detect common errors and send your filing back to you for you to correct, saving you a ton of time in processing and delays.
  • Make sure to clearly print or type your full name, taxpayer identification number or SSN, and current address (including zip code).
  • Choose only one correct filing status.
  • Enter your income on the correct lines and include a Form 1040 to declare additional income and adjustments as needed.
  • Put brackets around negative amounts.
  • Keep a copy of the signed return and schedules for your records.
 
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
 
Tip adapted from IRS.gov6

Healthy Living Tip
What is Mindfulness? 
You may have heard various definitions of mindfulness here and there or have your own ideas about what it is. Do you completely clear your mind? Is there more to it?

Interestingly, mindfulness is as simple as it sounds. It refers to the state of being fully present in where you are and what you’re doing. You can practice mindfulness as you're driving, as you’re walking your dog, or as you’re playing with your children. It’s practicing being in the here and now and not letting your mind take you out of the present moment. These obsessive thoughts can lead to anxiety and stress.

To practice mindfulness, take a simple activity, like drinking your cup of coffee, and think about every sensation you’re experiencing. It takes practice but is worth it to improve your mental strength!

Tip adapted from Mindful7

Weekly Riddle
What surrounds everyone and is the end of time and space?
 
Last week’s riddle: There is a 5-letter, single-syllable word
that you can take 4 letters out of, leaving you with only
a single letter that has the same pronunciation
as the original 5-letter word.
What is this word? (Hint: it involves waiting in line.)
Riddle answer: Queue.

Photo of the Week
Cheetah gazing into the distance, Namibia, Africa
Juneteenth National Independence Day
Offices Closed

Our offices will be closed on Monday, June 20, 2022,
in observance of Juneteenth National Independence Day.
 
NOTE: Because the Market Holiday falls on a Monday,
the Weekly Market Update will be available on Tuesday, June 21.
 
We will return to normal business hours
on Tuesday, June 21, at 8:00 am.
David P. Little
President | CWS®
Tyler D. Little
Vice President | BFA™
FOOTNOTES & SOURCES

1. The Wall Street Journal, June 10, 2022
2. The Wall Street Journal, June 10, 2022
3. The Wall Street Journal, June 10, 2022
4. CNBC, June 10, 2022
5. CNBC, June 10, 2022
6. IRS.gov, January 3, 2021
7. Mindful.org, July 8, 2020

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
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