Market Update
Wall Street proved resilient during the second quarter of the year, despite rising inflation, two interest rate hikes, and concerns about the debt ceiling. The economy remained relatively strong, despite predictions that it may be headed toward a recession. The second quarter saw information technology, communication services, and consumer discretionary account for most of the market gains. Energy, utilities, health care, financials, and consumer staples slid lower. The market's positive performance during the second quarter was buoyed by strength in the labor market, economic data that may be showing inflation is beginning to wane, and a better-than-expected first-quarter gross domestic product.
June was a strong month for stocks, with each of the benchmark indexes listed here posting gains of between 4.6% and 8.0%. Inflationary pressures showed signs of cooling, with the 12-month PCE price index coming in at 3.8%. The Consumer Price Index rose 4.0% for the year, the smallest 12-month increase since the comparable period ended March 2021. The Federal Reserve elected not to increase interest rates in June, opting, instead, to step back and assess additional information and its implications for monetary policy.
International Markets
China's post-pandemic economic recovery showed new signs of weakness in June. Manufacturing in China contracted for the third straight month in June, while the services sector also weakened. The latest data likely prompted the Chinese government to lower the one-year loan prime rate by 10 basis points. With inflationary pressures continuing to rise, the Bank of England hiked interest rates by 50 basis points in June, marking the 13th consecutive interest rate increase. Elsewhere, in Germany, manufacturing declined in both goods and services sectors. What was often the fulcrum of the German economy, weak global demand has impacted German exports. For June, the STOXX Europe 600 Index was flat; the United Kingdom's FTSE slid 0.8%; Japan's Nikkei 225 Index gained 5.3%; and China's Shanghai Composite Index dipped 0.9%.
On A Personal Note
Jeff had a friend visiting from England. They first met 50 years ago while working as counselors at a summer camp in New York. Chris’s daughters competed in the YMCA National Gymnastics competition in June. They both did very well and are proud of their accomplishments. Summer is in full swing at Drew’s house. With two teenage daughters, a bunch of friends and a pool, every day is a reminder that school is out. Sam and his family celebrated his dad’s 60th birthday with all of his favorite activities! They toured the Jim Beam distillery, enjoyed a nice steak dinner, and played a couple rounds of golf. Lisa and some of her friends had their annual girls weekend at Candlewood Lake in Ohio. Weather was perfect for boating, the water was still a little cold but they braved it out and got in anyway. Taylor spent time working on her 1920’s fixer upper house with her husband, enjoyed family dinners at her in-law’s house in Loveland, and went to the Concours car show at Lunken Airport.
The Washington Update Webinar
Our next Janney exclusive webinar will be on July 26th! Congress passed a spate of legislation last year, including the SECURE Act 2.0, which extends the “ROTHification” of retirement savings in the United States. Political and financial correspondent Jeff Bush will provide a nonpartisan, comprehensive overview of the political environment, prospective legislation, and strategies for investment and retirement planning to help you stay on track toward your financial goals.
All market update and international markets information is sourced from Forefield’s quarterly market review. This is being provided solely for informational and illustrative purposes, is not an offer to sell or a solicitation of an offer to buy the securities highlighted. The factual information given herein is taken from sources that we believe to be reliable, but is not guaranteed as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Past performance is not an indication of future results. Employees of Janney Montgomery Scott LLC or its affiliates may, at times, release written or oral
commentary, technical analysis or trading strategies that differ from the opinions expressed here. The S&P 500 is an unmanaged, capitalization-weighted index. Performance figures assume reinvestment of capital gains, dividends, but do not include any fees or expenses. The Dow Jones Industrial Average is commonly used as a proxy for the U.S. stock market. The DJIA is an unmanaged average of common stocks composed of stocks of major industrial companies and assumes reinvestment of dividends and capital gains distributions. It is not possible to invest directly in an index. Market Update, International Markets, FOMC and Interest Rates, and Eye on the Month Ahead content provided by Broadridge Investor Communication Solutions, Inc from the Monthly Market Review section.
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