Week Ending July 29, 2022
Cautiously optimistic..
A week of massive gains for the stock market incentivized by improving economic data, a 75 basis point federal funds rate bump, and positive remarks by Fed Chairman, Jerome Powell.
The market still has a long way to go, with mixed market data, but this recent promising shift in trend will certainly spur some optimism. While the conversation of a deep ‘recession’ seems to be lightening. I remain optimistic – but I would caution that we’re not quite out of the woods just yet.
Below is your Weekly Market & Economic Update.
Warmly,
Mark Sauer
info@AllOneWealth.com
+1(310)355-8286
Market Update
Global Equities, Fixed Income & Commodities
Global Equities: A huge week of earnings and economic news was mostly positive for stocks, with major US indices taking a leg maintaining momentum with strong weekly gains and finishing with the best monthly performance of the year. The Nasdaq Composite led domestic indices with a 4.7% gain, S&P 500 was up 4.3%, and the Dow Jones Industrial Average finished 3.0% higher. Developed International stocks were up 3.7% while Emerging Market stocks lagged with a 1.4% gain as the strong US dollar continues to pose a challenge for foreign investment.
Economic Update
Housing, Manufacturing & Tech Earnings
Powell Pivot? The Federal Open Market Committee (FOMC) meeting for July predictably resulted in another 75-basis point rate hike, however markets were more interested in what Chairman Powell had to say in his post-release press conference. Powell’s comments were largely in line with his typical, “data-driven” stance, but markets seized on the slightly dovish implication of his comments that a slowdown from the back-to-back 75-basis point hikes could be in the cards when the Fed next meets in September. Powell left the door open for a “soft landing” but acknowledged that “the path has clearly narrowed” in avoiding recession.
Charts of the Week
Nasdaq finding its bottom?
Our first Chart of the Week is the Nasdaq Composite, shown on a weekly basis. The 200-week moving average (red line) has been a downside target ever since the selloff commenced at the beginning of the year, since that line marked the bottom of the selling during the 2020 Covid crash – suggesting strong support during this selloff. Thus far, the 200-week level has held firm, and could mark the bottom of the year-to-date bear market – let us hope. Off the lows of June, we have seen positive price momentum marked by consecutive higher highs and lower lows, with strong market breadth lifting stocks across all sectors and market capitalizations.
Don’t get too excited… S&P 500 running into resistance
Our second chart is a look S&P 500, also shown on a weekly basis. Similarly, the S&P has found is way back into a more positive position however it’s now running into strong resistance as it approaches the 100-week moving average (red line). The 100MA will surely test the strength of this current rally and be a the next hurdle for the systemic market to over come in its efforts to reclaim 2021’s market value.
