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.
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.
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.
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.
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.
And that’s all for this week. Check out my Twitter (@ChicagoAdvisor) for more frequent updates. Have a great weekend everyone!
Sources and Disclaimers:
- Worst Quarterly Returns George Maroudas on LinkedIn
- S&P 500 Return from George Maroudas on Twitter
- Bond and Stock Decline Chart from Charlie Bilello
- 1 Euro = 1 Dollar chart from The New York Times
- Unemployment Rate chart from YCharts
- U.S. Added 372,000 Jobs in June from The Wall Street Journal
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