Here are 5 charts that tell a story about the stock market and the economy. For those of you who follow my LinkedIn or Twitter you might have seen these already.

1. Worst Quarterly Returns

We’re coming off one of the worst quarters in history. Where are we in the market a year from now? No one knows for sure but I see a lot of green on this chart.

Future performance is never guaranteed. However, it does make sense that periods of below average returns are often followed by periods of above average returns.

US Stocks Worst Quarterly Returns

2. Repeat of 1970?

U.S. stocks have experienced their worst start since 1970. During 1970, the market finished the year positive after being down -24.7%. Not saying this will happen again but it is interesting how similar 2022 has looked.

Stock market 2022 vs 1970

3. No Place to Hide

One of the reasons 2022 has been one of the most difficult investing environments is because both stocks and bonds are down. Historically, bonds have been used to dampen portfolio volatility when the market declines. Not this year. The sharp rise in interest rates has caused the prices of bonds to drop.

This chart from Charlie Billelo shows the last 8 times U.S. stocks were down in a calendar year, bonds finished up.

S&P 500 Down Years 1976 - 2022

4. 1 Euro = 1 Dollar

The U.S. Dollar index is at its highest levels since 2002. On the flipside, the Euro is at its lowest level since 2002. This has caused the Euro to equal the U.S. Dollar for the first time in 20 years.

How many dollars one euro buys

5. Strong Job Market

We are continuing to see a strong job market despite recession concerns. The U.S. economy added 372,000 in June. The unemployment rate remained at 3.6% for a fourth straight month, near the 50-year low that was reached before the pandemic.

US Unemployment Rate

And that’s all for this week. Check out my Twitter (@ChicagoAdvisor) for more frequent updates. Have a great weekend everyone!

George Maroudas

Twitter @ChicagoAdvisor

Sources and Disclaimers:

  1. Worst Quarterly Returns George Maroudas on LinkedIn
  2. S&P 500 Return from George Maroudas on Twitter
  3. Bond and Stock Decline Chart from Charlie Bilello
  4. 1 Euro = 1 Dollar chart from The New York Times
  5. Unemployment Rate chart from YCharts
  6. U.S. Added 372,000 Jobs in June from The Wall Street Journal

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Please consult your financial advisor regarding your specific situation. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. All investing involves risk including loss of principal. No strategy ensures success or protects against loss. This information is not intended to be a substitute for specific individualized tax advice. The Standard & Poor’s Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.