- The revised estimate of second quarter GDP showed a modest contraction of (0.6%), marking consecutive negative GDP prints and heightening expectations that the United States has or will fall into a recession.
- Inflation remains high but decelerated in July.
- Jobs remain plentiful for now with the Unemployment Rate falling to 3.5%.
- Consumer Confidence increased for the month after three straight declines, a potential positive for consumer spending outlook.
Select economic and market data
Statistic (monthly unless noted)
|U.S. GDP (quarterly)||-0.6%||-1.6%|
|Consumer Price Index Y/Y||8.5%||9.1%|
|2-Year Treasury Yield||3.50%||2.89%|
|10-Year Treasury Yield||3.20%||2.65%|
- Stocks fell in August with the S&P 500 losing over 4% for the month, dashing hopes of a sustained rally for the time being.
- Losses were broad-based for the month, with only Emerging Markets stocks posting a gain.
- Year-to-date, 2022 has seen all major stock indices post double-digit declines.
- Treasury rates moved sharply higher as the Fed appears poised to maintain tighter monetary policy.
- The yield curve remains inverted, which is often associated with recessionary periods.
- Aside from T-bills, bonds lost value in August and are sharply lower year-to-date.
- Neutrally positioned on equities while slightly favoring international over domestic for long-term returns.
- Maintaining shorter-duration fixed income structure as the rising interest rate environment is likely to persist.
- Finding value in select domestic equities while trimming outsized “growth” exposure.
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