Weekly Market Update 04/17/2022
by Justin J. Long CFP®, on Apr 17, 2022
This week saw the celebration of National Pets Day on Monday and our crew here at Diazo celebrated with some of our best co-workers.
As you can see below our children are also quite prepared with their extensive egg collection for the great egg hunt happening today.
I hope everyone has had a wonderful and relaxing weekend.
Our Quarterly Market Update, which is our deep dive in to the economy and overall markets is scheduled for 12:00 P.M. on May 2nd. Keep an eye out for the invitation coming soon.
And now on to the recap of this week:
Week in Review: Bad week for the growth stocks
The week was shortened in observance of Good Friday, but it was a "Bad Week" for the growth stocks amid upwards pressure in interest rates. The impact of the growth stocks was reflected in the underperformance of the S&P 500 (-2.1%) and Nasdaq Composite (-2.6%) relative to the Dow Jones Industrial Average (-0.8%) and Russell 2000 (+0.5%).
The small-cap index closed higher, while the S&P 500 fell further below its 200-day moving average (4495) and even closed below its 50-day moving average (4418). The information technology (-3.8%), communication services (-3.0%), health care (-2.9%), and financials (-2.7%) sectors led the retreat.
The declines in the first two sectors were linked to the moves in the Treasury market, where the 10-yr yield rose another 12 basis points to 2.83% despite a return of the peak inflation narrative. That narrative was supported by a brief, two-day decline in rates following hot CPI and PPI data for March.
The Vanguard Mega Cap Growth ETF (MGK) fell 3.3%, whereas the Invesco S&P 500 Equal Weight ETF (RSP) decreased "just" 0.9%.
The financials sector, in particular, was pressured by an EPS miss from JPMorgan Chase (JPM) and a revenue miss from Wells Fargo (WFC). The other banks, for the most part, reported better-than-expected earnings results with mixed reactions.
There were some positives, though. The materials (+0.7%), industrials (+0.4%), energy (+0.3%), and consumer staples (+0.2%) sectors ended the week in positive territory.
Airline stocks were strong after American Airlines (AAL) raised its Q1 revenue guidance and Delta Air Lines (DAL) supplemented better-than-expected earnings results with upbeat bookings commentary. The U.S. Global Jets ETF (JETS) rallied 8.0% this week.
|INDEX||STARTED WEEK||ENDED WEEK||CHANGE||% CHANGE||YTD %|
As always, it is my pleasure to bring you this weekly update. If this or anything else is causing you pause or you would like further details, please feel free to reach out to me and we can schedule some time to chat.
Justin J. Long CFP®
Diazo Wealth Group
Upcoming Economic Calendar
Source: 1. FactSet
Source: Week in perspective provided by Briefing.com. Briefing.com offers live market analysis on their web site www.Briefing.com.
The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.
The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.
The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.
Oil prices are represented by West Texas Intermediate (WTI) crude oil.
The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.
Innovative Adviser Solutions, LLC, a registered investment adviser, dba Diazo Wealth