Weekly market snapshot - Butler Financial, LTD
Can the Fed pull off a soft landing? - May 25, 2022

Resources

Weekly market snapshot

Chief Economist Scott Brown discusses the latest market data.

Tensions in Ukraine dominated. Share prices fell and bonds rallied.

Tensions in Ukraine dominated. Share prices fell, bond yields declined and oil prices popped, but markets reversed direction on news that Russia was willing to come to the negotiating table.

Personal income was flat in January (-2.1% y/y), as the end of the extended child tax credit was partly offset by the 5.9% cost-of-living adjustment in Social Security. Private sector wage and salary income rose 0.5% (+11.2% y/y). Personal spending rose 2.1%, following a 0.8% decline in December (+11.8% y/y). The PCE Price Index, the Fed’s chief inflation gauge, rose 0.6% (+6.1% y/y), up 0.5% (+5.2% y/y) ex-food and energy. Durable goods orders rose 1.6% in January, up 0.7% ex-transportation, with a large upward revision to December.

Next week: The situation in Ukraine will remain key, but it will be an important week for the economic outlook and Fed policy expectations. Chair Powell’s semiannual monetary policy testimony is likely to remain consistent with a 25-bp hike (rather than 50 bps) in mid-March, then another 25-bp hike at every policy meeting (perhaps pausing when the balance sheet reduction starts later this year). ISM surveys for February should show strength. The February Employment Report will be subject to some seasonal distortions, but the underlying trend in nonfarm payrolls should remain strong.



Indices

 LastLast WeekYTD return %
DJIA33,223.8334,312.03-8.57%
NASDAQ13,473.5913,716.72-13.88%
S&P 5004,288.704,380.26-10.02%
MSCI EAFExx2,256.56-3.40%
Russell 20001,996.012,028.09-11.10%



Consumer Money Rates

 Last1 year ago
Prime Rate3.253.25
Fed Funds0.070.08
30-year mortgage4.173.14



Currencies

 Last1 year ago
Dollars per British Pound1.3391.414
Dollars per Euro1.1201.217
Japanese Yen per Dollar115.400105.870
Canadian Dollars per Dollar1.2801.251
Mexican Peso per Dollar20.54720.853



Commodities

 Last1 year ago
Crude Oil94.7863.22
Gold1,910.101,797.90



Bond Rates

 Last1 month ago
2-year treasury1.600.97
10-year treasury1.981.78
10-year municipal (TEY)2.452.05



Commodities

 Last1 year ago
Crude Oil91.7661.14
Gold1,902.001,772.80



Bond Rates

 Last1 month ago
2-year treasury1.470.97
10-year treasury1.961.78
10-year municipal (TEY)2.581.88


 

Treasury Yield Curve – 2/25/2022

Treasury Yield Curve

As of close of business 2/24/2022

 

S&P Sector Performance (YTD) – 2/25/2022

S&P 500 Sector Performance

 As of close of business 2/24/2022

Economic Calendar

February 28 —  Chicago Business Barometer (February)
March 1 —  ISM Manufacturing Index (February)
March 2 —  ADP Payroll Estimate (February)
 —  Powell Monetary Policy Testimony (House)
 —  Fed Beige Book
March 3 —  Jobless Claims (week ending February 26)
 —  Powell Monetary Policy Testimony (Senate)
 —  ISM Services Index (February)
March 4 —  Employment Report (February)
March 10 —  Consumer Price Index (February)
March 16 —  Retail Sales (February)
 —  FOMC Policy Decision
May 4 —  FOMC policy decision


 

All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business February 24, 2022.









Other posts you might like
ButlerFinancial
Weekly market snapshot

Economy and Policy February 18, 2022 Chief Economist Scott Brown discusses the latest market data.Tensions...

read more
ButlerFinancial
Rising tensions

Economy and Policy February 18, 2022 Chief Economist Scott Brown discusses current economic conditions. The...

read more
ButlerFinancial
Markets weigh Russian threat to Ukraine

Economy and Policy February 16, 2022 Developments on the ground in Ukraine may mean more than official...

read more