Perspective Amid A Moment Seeming Fraught With Investment Risk
Published Friday, March 18, 2022 at: 7:48 PM EDT
Russia is challenging world order, inflation is at a 40-year high, and a stock market correction has been underway. The relentless progress of the United States is being tested once again. Here’s an important perspective on this moment in financial history.
On March 23, 2020, the stock market bottomed. The Covid bear market had erased -33.9% of the value of the Standard & Poor’s 500.
In that moment, which preceded the advent of vaccines, no one knew the bear market was over. No one knew the stock market would appreciate by 71% in the next 21 months. In the throes of the Covid crisis, no one expected the U.S. government would embark on the largest transfer payments programs since The New Deal.
In that fraught time, no one predicted that the American consumer’s balance sheet, two years hence, would be stronger than ever in modern American history. Nor did anyone foresee that the Covid-19 would be managed much the flu.
The Standard & Poor’s 500 stock index closed Friday at 4,463.12, up +1.17% for the day, and a breathtaking +5.97% from last week. The index gained +66.43% in value from the March 23, 2020, bear market low, as of Friday, March 18’s close.
Compared to the January 3, all-time closing high, stocks dropped by as much as -12.5% on March 8 before rebounding sharply.
The U.S. Index of Leading Economic Indicators (LEI), released this morning, provided fresh evidence that 2022 economic growth will exceed the 2.2% 10-year growth rate expected by the nonpartisan Congressional Budget Office. By a substantial amount. The Conference Board, which collects the data for the 10-subcomponents of the LEI lowered its forecast for U.S. economic growth in 2022 to 3% from 3.5%. The Ukraine situation prompted Ed Yardeni and J.P Morgan to lower their forecasts for U.S. gross domestic product growth.
Point is, every moment seems fraught with risk. Seeing beyond a seemingly bleak moment is hard most of the time. Who knew two years ago we’d be trying to slow economic growth to tame inflation while a Russian despot faced an existential economic war?
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
- The Good News Is All This Bad News
- Four Signs A Recession Could Be Short And Shallow
- Odds Of A Soft Landing Shrunk After Friday's News
- Bad Inflation Surprise Sends Stocks Down Sharply
- It Could Be A Long, Hot Summer For Investors
- What A Difference A Week Makes
- Amid Stock Market Turmoil, +2.3% Growth Projected In 2022
- Staying On Track Amid The Ukraine And Inflation Crises
- For Investors, 2022 Is Turning Into A Test
- Is The Economy Brightening? Or Is The Federal Reserve Slamming The Door On Growth
- Financial Economic News In Perspective
- Stocks Closed Lower This Week On Inflation Fears
- The Main Risk To Investors Now Is Federal Reserve Policy
- Service Sector Jobs Are Catching Up
- Stocks Returned +8.3% More Annually Than 90-Day T-Bills In Past 20 Years
- Perspective Amid A Moment Seeming Fraught With Investment Risk
- Two Years After The Pandemic Began
- Turning The Page On A Dark Period In History
- Russia-Ukraine War Erupted And Inflation Worsened But Outlook Drove Stocks Higher For The Week
- Investment Perspective Amid Risks Of Fed Tightening, Covid Variants, And European War
- S&P 500 Lost -1.9% Friday; Latest U.S. Economic Data Are Strong
- January Job Formation Figures Crushed Expectations, Amid A Shortage Of Workers
- S&P 500 Closed Up 2.4% Friday After A -10% Correction
- Stocks Declined Sharply, Even As Economists Expect 3% Growth In 2022