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Weekly Economic Update: July 5th, 2022

July 5th, 2022

Weekly Market Update

In this week’s recap: Pre-holiday markets see no rebound.

The Week on Wall Street

Stocks turned lower as a quiet news week offered investors little fresh visibility into the market overhangs of economic slowdown and inflation.

The Dow Jones Industrial Average dipped 1.28%, while the Standard & Poor’s 500 fell 2.21%. The Nasdaq Composite index dropped 4.13%. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.49%.^1,2,3

Rebound Fizzles

Stocks struggled last week amid poor market liquidity typical of the summer months and a news vacuum ahead of the second-quarter earnings reports. Investors also appeared to be anticipating guidance at the July Federal Open Market Committee meeting. What little news there was proved generally disappointing. A steep decline in consumer confidence preceded Fed Chair Powell's acknowledgment that inflation may persist.

Stocks stumbled after a profit warning from a high-end retailer, which highlighted recession risks. The sentiment suffered from a 4.7% increase in the core personal consumption expenditures index, which is the Fed’s preferred measure of inflation. It remained near levels not seen since the 1980s.⁴

Consumer Confidence Wanes

The Conference Board’s Consumer Confidence Index declined to its lowest level since February 2021, falling from 103.2 in May to 98.7 in June (1985=100). While consumers’ assessment of current conditions slipped only marginally, their short-term outlook for income, business, and labor market conditions eroded substantially, touching its lowest level since March 2013.⁵

This rising pessimism about the short-term outlook was especially notable in consumers' assessment of financial prospects, with 15.9% expecting their incomes to increase (down from 17.9% in May) and a growing share of individuals expecting their incomes to decrease (15.2% in June vs. 14.5% in May).⁶

Tip of the Week

If you are a single parent, a will, a power of attorney, and disability income insurance are some documents you should consider – after all, you are the sole provider.

Radio

Time Change! Retire Ready with David Nicholas will now be airing on Saturdays at 6:00 PM on 95.5 WSB. Be sure to tune in this weekend! If you missed this past weekend's show, CLICK HERE to listen!

Media

Be sure to subscribe to our YouTube page for all of David’s media commentaries CLICK HERE!

[yotuwp type="videos" id="SAO_pgZP8xs" ]

When should investors buy in a bear market? Historically when the S&P 500 is down 20%, 5 years later it is up over 60%. David Nicholas joined Charles Payne on Fox Business last Thursday, 6/30 to discuss when investors could expect the market to bottom.

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