Market & Economic Update: Are Things Really This Bad?


A little excerpt on the first 100 trading days of 2022 from Bespoke, my favorite market newsletter: 

“While everyone knows that the U.S. equity market has performed horribly in 2022, did you know that it has actually been the second-worst first 100 trading days in a year since the five-day trading week began in late 1952? Through early trading today (5/25), the S&P 500 is down 17.3% YTD, which ranks second only to 1970 for the worst start to a year when the index declined 23.7% in the first 100 trading days. Not only that, but this year has seen the worst start on record for both the Nasdaq (since 1972) and the Russell 2000 (1979), which have declined by 27.9% and 21.4%, respectively.”


After reading that, my first thought was: Are things really that bad to warrant what, collectively, is the worst start to a year in stock market history?


In our last market commentary in early May, we discussed the proverbial wall of worry investors are dealing with today. Inflation, interest rates, supply chain issues, the war in Ukraine, and China’s inability to control COVID-19 — which has had a profound impact on the global supply chain — and extremely low investor sentiment. Undoubtedly, this is a lengthy list of issues to overcome before the U.S. economy gets back on track, but, again, does this all add up to justifying the worst start to a year in stock market history?


On at least a temporary basis, the markets are oversold, and the rally over the last week has been long overdue. If the markets hold the gains from this week on Tuesday, the last trading day of May, the Dow Jones Industrial Average (DJIA), the Nasdaq, and the Russell 2000 will all finish the month of May in the green. Not a bad way to go into the long weekend!


We will keep you posted on what these next weeks bring.