May Investment Perspectives

This month’s Investment Perspectives highlights some things that could go right for the economy and markets, a look at TIPS, and stocks and the midterm elections.

In this month's issue:

What Could Go Right - Mark Luschini

Much has been written, including in many of our publications, about the unusual degree of macroeconomic uncertainty that is serving to batter markets and render near-term prognostications futile.

The factors that are most unsettling include: inflation at a 40- year high, a Federal Reserve abruptly turning stingy, a global growth slowdown induced by the spillover from the war in Ukraine and China’s stringent “zero-tolerance” COVID policy, and the ubiquitous rise in interest rates that is beginning to infringe on business activity. Collectively, these have served to induce volatility and pressure stock prices even as the economy, and corporate profit growth, are expected to remain positive through the year, if not beyond.

Inflation (Un)Protection - Guy LeBas

Inflation is a perennial topic in notes focused on fixed income. No wonder: Inflation is, even in normal times, a major source of risk and return.

The topic has certainly appeared in many Investment Strategy Group reports in the past year. In the May 2021 Investment Perspectives, we pointed out that monthly inflation had likely peaked, but inflation had a long tail that would drag out into 2022. In a November 2021 report, The Supply Chain: Major Themes for Fixed Income Investing, we clarified some of the sources of this inflation.

Market in May: Rates, Midterms, and the Economy - Greg Drahuschak 

Despite its reputation as a generally good month for stocks, last month produced the second-worst April results for the S&P 500 in the past 72 years. With the 4.2% drop on the final trading day of April, the Nasdaq Composite Index was down 21.16% for its worst start to a year on record. As usual, the market had to contend with various issues, but none was more influential than concern about how far the Federal Reserve Open Market Committee (FOMC) would go to adjust credit conditions.

You can read the full Investment Perspectives here.


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.