June Investment Perspectives

Finding direction with manufacturing and services data, fixed income & economic growth, and issues facing stocks this summer.

In this month's issue:


We Remain Vigilant Bulls - Mark Luschini

Among the many variables we watch to help prognosticate the general direction of the economy and stock prices, the Institute for Supply Management’s Purchasing Managers’ Index (PMI) is one of the most important.

Let me interject by saying no single data point, or collection of data, is infallible. After all, the economy is dynamic. Markets are reacting to not what we know today, but rather what the future is likely to hold. That creates a non-trivial amount of forecasting error since many things can change rapidly.


A Turn Towards Slowing - Guy LeBas

Inflation has been, far and away, the most concerning element of the economy for the fixed income markets. From late 2021 into 2022, the (historically boring) monthly Consumer Price Index release has taken on greater attention than the (historically volatile) monthly manufacturing index and jobs releases. That shift in attention seems only natural when inflation data have been on an unusual path. However, last month brought with it a notable shift in the underlying concern of elevated inflation to that of risks to downside economic growth.


Summertime And The Livin’ Is Expensive - Greg Drahuschak 

Last month’s contribution to Investment Perspectives ended by suggesting that technical issues could weigh on the market and necessitate an additional move lower before establishing a base for a solid rebound.

A move lower through most of May accompanied recession or bear market concerns that dominated the financial press. At one point in May, the S&P 500 year-to-date was down more than 19% with only 1932, 1940, and 1970 having worse starts to a year. As a result, sentiment expressed by the American Association of Individual Investors (AAII) survey had a significantly negative bias. Although extremely negative sentiment often marks a positive turn in market fortunes, it was not enough to influence the market until it combined with a significantly oversold technical condition to produce a late-month selling reprieve that by May 27 brought the S&P 500 to a modest gain for the month.


You can read the full Investment Perspectives here.


Disclaimer

The information herein is for informative purposes only and in no event should be construed as a representation by us or as an offer to sell, or solicitation of an offer to buy any securities. The factual information given herein is taken from sources that we believe to be reliable, but is not guaranteed by us as to accuracy or completeness. Charts and graphs are provided for illustrative purposes. 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.

The concepts illustrated here have legal, accounting, and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your particular circumstances. Past performance is not an indication or guarantee of future results. There are no guarantees that any investment or investment strategy will meet its objectives or that an investment can avoid losses. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. A client’s investment results are reduced by advisory fees and transaction costs and other expenses.

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 within. From time to time, Janney Montgomery Scott LLC and/or one or more of its employees may have a position in the securities discussed herein.