So, as we approach the halfway mark through the year, it’s important to note that U.S stocks are on track to mark their worst first half of the year in more than 50 years. The S&P 500 is down around 18% year-to-date, on track for its worst first half of any year since 1970, and the NASDAQ closer to 30% as the Fed tightens monetary policy in its fight against the highest inflation in decades. So relative to holding cash since the start of the year, stocks have been trashier.
Bonds, which investors typically count on to counterbalance stock declines in their portfolios, have fared little better: The U.S. bond market, as measured by the Vanguard Total Bond Market Index fund, is down 10.8% for the year to date, putting it on pace for its worst performance in modern history.
That said of course the value of cash is being deflated in real terms by high inflation, so its not perfect, but lessons from history suggest that sometimes it’s a reasonable holding place, until markets bottom. And with investor expectations fluctuating between continued high inflation and an economic downturn caused by a hawkish Fed, few believe the market’s volatility will dissipate anytime soon. Remember that on Thursday, Fed Chair Jerome Powell said the central bank’s focus on curbing inflation was “unconditional”, adding to fears about more interest rate hikes.
[CONTENTS]
0:00 Start
0:15 Introduction
1:15 Worst First Half
2:30 Inflation Control Unconditional
4:10 Leading Indicators
9:30 More FED comments
13:14 US Market
14:15 Oil
16:54 US Bank Stress Tests
19:30 European Markets
20:58 Asian Markets
23:10 Australian Markets
27:40 Crypto and Harmony
29:50 Conclusion and Close
The latest edition of our finance and property news digest with a distinctively Australian flavour.
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