Three Things to Know & Watch

May 23, 2022

By Bill Hornbarger, Chief Investment Officer

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Three Things to Watch

  • After weaker-than-expected reports from retailers Target and Walmart last week contributed to broad market selling, investors will get another round of earnings reports from the retail sector that will be closely watched. Macy’s, Costco, Nordstrom, and Best Buy are a few of the retailers that will release earnings this week.
  • Fed speakers will be back on the circuit this week (six scheduled), including Fed Chairman Jerome Powell on Tuesday. The FOMC minutes from the May 4 meeting (when the Fed increased rates 50 basis points) will be released on Wednesday. These comments coincide with the backdrop of weaker equities and increasing recession concerns.
  • The data calendar is highlighted by new and pending home sales for April on Wednesday and Friday, respectively, the University of Michigan Consumer Sentiment reading on Friday, and the personal consumption expenditure (PCE) deflator, also on Friday. The PCE deflator is the Fed’s favored measure of inflation and is expected to indicate that the rate of inflation is still elevated but slowing.

Three Things to Know

  • The S&P 500 Index closed just above bear market threshold late on Friday but has now logged seven straight losing weeks for the first time since 2001. (Source: Seeking Alpha)
  • Over the past 15 years, there have been 36 daily sell-offs of 4% or more, and the VIX was never as low as it was on Wednesday. (Source: Goldman Sachs, zerohedge)
  • The S&P 500 dipped into bear market territory on Friday, with the S&P 500’s decline from its January all-time high hitting 20% at one point, before a late-session reversal lifted the benchmark index to a flat finish and out of bear market territory. (Source: Seeking Alpha)

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.