Market Recap: June 2022

July 06, 2022
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Market commentary

  • Continuing to be a topic of concern, inflation rose again, with the CPI posting an 8.6% annual increase.
  • Responding to the latest inflation data, the Fed hiked short-term rates by 0.75%, clearly signaling that taming inflation is top priority.
  • Final GDP data for the first quarter of 2022 reported the economy contracted by 1.6%.
  • Although unemployment remained steady, Consumer Confidence dropped to 98.7.

 

Select economic and market data

Statistic (monthly unless noted)

Current

Previous

U.S. GDP (quarterly) -1.6% 6.9%
Consumer Confidence 98.7 103.2
Consumer Price Index Y/Y 8.6% 8.3%
Retail Sales -0.3% 0.7%
Unemployment Rate 3.6% 3.6%
2-Year Treasury Yield 2.95% 2.56%
10-Year Treasury Yield 3.01% 2.84%

 

Equities

  • Equities saw substantial declines in value across a broad spectrum of security types and indices, adding to negative YTD returns.
  • Although both suffered equally in June, value continues to significantly outpace growth so far this year.
  • The Energy sector lost nearly 17% in June; however, it remains the only S&P 500 sector with positive YTD returns, at 31.6%.
Equities Indices June 2022

 

Fixed income

  • Treasury rates rose across the maturity spectrum in response to the Fed rate hike, with rates on shorter maturities rising more than on long maturities.
  • Most fixed income indices saw negative returns in June, deepening YTD losses.
Fixed Income Indices June 2022

 

Strategic outlook

  • 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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