The Week in Review 4/18/2022

"Swim upstream. Go the other way. Ignore the conventional wisdom." - Sam Walton

Good Morning,

Happy Tax Day!

The broader markets traded marginally lower again for the second straight week. Last week CPI came in at 8.5% adding fuel to the inflation narrative fire. Inflation has brought historic selling pressure and sentiment into the bond market as well.

In the past, this type of extreme sentiment has marked the end of the trend and will be something we monitor the next few weeks.The broader markets traded marginally lower again for the second straight week. Last week CPI came in at 8.5% adding fuel to the inflation narrative fire. Inflation has brought historic selling pressure and sentiment into the bond market as well.

Defensive sectors such as HealthCare, Utilities, and Consumer Staples continue to see a record number of new highs relative to cyclical sectors.

Earnings season kicked off last week with several big banks reporting. It’s a mixed bag thus far. Trading was mixed as some companies beat street estimates but provided only moderate outlooks.

A quartet of large U.S. banks shifted the first quarter reporting season into overdrive, with Goldman Sachs, Citigroup, Morgan Stanley and Wells Fargo all posting results that beat Wall Street estimates. Their share price reaction was mixed, and was last moving in the range of up 1.6%. Bank of America reports today.

Market Update…

• Oil Prices - Oil prices rose slightly last Friday with West Texas Intermediate rising 2.59% and closing at $106.95/barrel while Brent crude gained 2.68% and settled at $111.70.
• Gold - Spot gold fell 29% to $1,971.95 per ounce while U.S. gold futures slipped 0.49% to $1,974.9 per ounce, but gained 1.51% for last week. Silver finished the week at $25.70.
• U.S. Dollar - The dollar index rose 0.08% to 100.48, edging back toward the two- year high of 100.78. Euro/US$ exchange is now 1.095.
• U.S. Treasury Rates - On Thursday, the benchmark 10-year U.S. Treasury yield rose back to multiyear highs, climbing 13 basis points to top 2.82%.
• Asian shares were mixed in overnight trading.
• European markets are trading lower.
• Domestic markets are trading lower this morning.

While inflation remaining so high, so likely will volatility… certainly as the Fed prepares to raise interest rates again in early May and continues to tighten policy this year.

Despite this, our cautiously optimistic outlook for 2022 remains intact.

U.S. consumer sentiment unexpectedly rose to a three-month high in early April amid optimism about job growth and wage expectations.

The next few months will be a key indicator on inflation and how the Fed will manage its projected “soft landing.” The broader market view is a continuation of the big, broader choppy range: S&P 4100 to 4600.

April begins the softest 6 months of the investment year historically, so we temper our expectations… watching the Fed moves on rates and their balance sheet, and enjoying our dividend income.

Have a great week!

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The information contained herein is general in nature and does not constitute legal or tax advice. Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. The Dow Jones Industrial Average (INDU) is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The Dow Jones Transportation Average (DJTA, also called the "Dow Jones Transports") is a U.S. stock market index from the Dow Jones Indices of the transportation sector, and is the most widely recognized gauge of the American transportation sector. Standard & Poor's 500 (SPX) is a basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value, and its performance is thought to be representative of the stock market as a whole. The NASDAQ

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