June 20-24, 2022 Recap
Best Week in a Month
Recession Fears Subside
U.S. stocks rebounded from three weeks of declines as equity sentiment was bolstered by comments from Fed officials while a reading on inflation expectations eased. St. Louis Fed President Bullard said worries over a U.S. recession are overblown, even after Fed Chairman Powell intensified his resolve to cool inflation with aggressive interest rates in testimony to Congress. The S&P 500 surged over 3% on Friday, to cap its second-strongest weekly gain of the year.
For the Week…
The S&P 500 surged 6.46%, its best (and only) weekly gain since a 6.6% rally for the week ending May 27. The Dow Jones Industrial Average gained over 800 points for a 5.39% advance while the tech-heavy Nasdaq Composite rallied the most, up 7.51%.
New Home Sales Jump
U.S. new home sales climbed by 10.7% to an annualized pace of 696,000 in May (587,000 expected). New home sales are still down 5.9% from a year ago. Even as the supply of new homes for sale fell 7.2% last month, the median sales price declined to $449,000 from a record-setting $454,700 the month prior.
Consumer Discretionary Outperforms
All but one of 11 major sector groups posted gains last week with Consumer Discretionary (+8.25%), Healthcare (+8.17%) and Real Estate (+7.79%) at the top of the leaderboard. Industrials (+4.24%) and Materials (+2.70%) gained the least, while Energy (-1.55%) was the only declining sector. Energy (+31.95%) is still this year’s top performing sector.
Treasury Yields Decline
Treasury security prices rebounded last week, trimming yields. The yield on 10-year Treasury notes eased to 3.125% from 3.236% the week prior. Separately, the U.S. Dollar Index weakened by 0.49% for its first weekly pullback since May 27. Despite intra-week volatility, U.S. WTI crude oil futures were little changed on the week, ending at $107.62.
Monday, June 27
Durable & Capital Goods Orders, Pending Home Sales
Tuesday, June 28
Goods-only Trade Balance, S&P Case-Shiller Home Prices, Consumer Confidence
Wednesday, June 29
Mortgage Activity, 1Q Final GDP, Personal Consumption, GDP Prices
Thursday, June 30
Jobless Claims, Personal Income & Spending, PCE Prices, MNI Chicago PMI
Friday, July 1
ISM & S&P Global US Manufacturing, Construction Spending
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The Bloomberg US Aggregate Bond Index, which was originally called the Lehman Aggregate Bond Index, is a broad based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government–related and corporate debt securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency) debt securities that are rated at least Baa3 by Moody’s and BBB- by S&P. Taxable municipals, including Build America bonds and a small amount of foreign bonds traded in U.S. markets are also included. Eligible bonds must have at least one year until final maturity, but in practice the index holdings have a fluctuating average life of around 8.25 years.
The Bloomberg US Corporate High Yield Index measures the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Payment-in-kind and bonds with predetermined step-up coupon provisions are also included. Eligible securities must have at least one year until final maturity, but in practice the index holdings has a fluctuating average life of around 6.3 years.
The Bloomberg US Municipal Bond Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. Eligible securities must be rated investment grade (Baa3/BBB- or higher) by Moody’s and S&P and have at least one year until final maturity.
The MSCI EAFE Index is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The MSCI Emerging Markets Index is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The Bloomberg Commodity Index is a broadly diversified index that measures 22 exchange-traded futures on physical commodities in five groups (energy, agriculture, industrial metals, precious metals, and livestock), which are weighted to account for economic significance and market liquidity. No single commodity can comprise less than 2% or more than 15% of the index; and no group can represent more than 33% of the index.
The S&P GSCI Crude Oil Index is a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.
The S&P GSCI Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark tracking the COMEX gold futures market.
The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000.