Friday Comeback Not Enough – Monday Morning Market Memo – May 23, 2022

Friday Comeback Not Enough – Monday Morning Market Memo – May 23, 2022

Stocks staged a comeback rally late in the day last Friday, but it was still not enough to salvage the week.  The Dow Jones Industrial Average was down over 600 points at one point Friday before rallying back to close slightly positive.  The Standard & Poor’s 500 Index hit Bear Market territory Friday (down more than 20% from its peak) but avoided closing there, as it also turned positive by day’s end.

 

For the week however, the major averages all finished in negative territory and their losing streaks continued – the Dow fell 2.9%, its 8thstraight weekly decline and longest losing streak since 1932 (according to data from Dow Jones), the Standard & Poor’s 500 Index dropped 3%, and the NASDAQ Compositeshed 3.8%, both of which are 7-week losing streaks.

 

There was not a single factor behind the weekly losses, but rather continued focus on the same list of headwinds.  Inflation, Federal Reserve interest rate hikes, slowing global growth, worries over recession, geopolitical turmoil, and negative psychology/momentum all continue to weigh on the stock market.  History is replete with these types of problems, corrections, bear markets, and reasons not to invest – yet the market has always recovered!  While past performance is no guarantee of future results – the world is only going to end once.

 

First quarter 2022 Earnings Season is winding down and almost in the history books, but not before we get another interesting batch of reports this week.  Companies scheduled to report include Advance Auto PartsZoom VideoAutoZoneBest BuyToll BrothersDICK’s Sporting GoodsCostco WholesaleNvidiaUlta Beauty, and Intuit.  Last week’s earnings reports were highlighted by major retailers, and the overall results were generally viewed as a disappointment, so we’ll see if this week’s reports can get investors in a better mood.

 

As always, don’t hesitate to contact us with any questions, or if you would like to set up a meeting.

All the best – Southport Station Financial Management, LLC