We are back after a needed break for Memorial Day last week. In a holiday-shortened week of volatile trading, stocks surrendered some of the previous week’s strong gains.
2 weeks ago all the major indexes were up including a stunning 6.6% for the S&P to bring it back from very near Bear-market territory. (Down 20% is the definition of a Bear market.) When the market closed on the 31st, the month ended with the S&P flat -- up just 0.01%.
For the most recent week the Standard & Poor’s 500 declined 1.20%, while the Dow Jones Industrial Average fell 0.94%. The Nasdaq Composite index lost 0.98% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.17%.1,2,3
An Uncertain Market
Stocks experienced wild swings last week, in part, due to ongoing uncertainty over economic health and the path of inflation. Investors seemed conflicted when interpreting the data, in some instances viewing economic strength as a negative since it may mean more aggressive rate hikes from the Fed.
Illustrative of how this uncertainty has played out, stocks surged higher on Thursday despite comments from Fed Vice Chair Lael Brainard indicating it’s unlikely that the Fed will pause on rate hikes. Then on Friday, stocks dropped as a better-than-expected jobs report raised concerns about monetary policy.
Strong Job Growth
The U.S. economy added 390,000 jobs in May, a slowdown from recent months but higher than consensus estimates. Job gains registered in several categories, led by leisure and hospitality, professional and business services, and warehousing and transportation. The retail sector lost jobs.4
The unemployment rate remained unchanged at 3.6%. Wage growth cooled off, with a 12-month increase of 5.2%, down from April’s year-over-year jump of 5.5%. Finally, the labor participation rate ticked higher again, reflecting how job availability is helping to pull Americans off the labor-market sidelines.5
What I'm Hearing
A recent (5/31) LinkedIn post from Jason Hsu, Founder & CIO at Rayliant Global Advisors, caught my attention. He suggested that China's Covid lock-down may be ending for the following two unexpected reasons.
"1. It has been discovered that a major COVID testing kit manufacturer has produced kits with suspiciously high false positive rate. This is likely profit driven. Once a community has a positive test, the whole community gets tested and re-tested constantly. This discovery has caused Beijing to question whether they are managing to bad data and are duped by COVID related supply vendors.
I may be guilty of confirmation bias here, but I hope to see signs of a gradual reduction in supply-chain bottlenecks over the summer. If that happens, one of the 2 major impediments to getting a handle on inflation will be removed.
Why I still hate crypto
Everyone should know about Molly White and her website, https://web3isgoinggreat.com/ - a chronicle of all the rip-offs in this space. It seems like every day there is a new NTF scheme exposed.
Also, Bloomberg reports that the Crypto industry spent more on political donations than internet giants, drug makers or the entire defense industry -- providing a fresh pool of financing for candidates heading into November’s congressional elections. This won't end well.
This Week: Key Economic Data
Thursday: Jobless Claims.
Friday: Consumer Price Index (CPI). Consumer Sentiment.
Source: Econoday, June 3, 2022
This Week: Companies Reporting Earnings
Monday: Coupa Software, Inc. (COUP).
Wednesday: Campbell Soup Company (CPB).
Thursday: DocuSign (DOCU).
Source: Zacks, June 3, 2022
"I can accept failure. Everyone fails at something. But I can't accept not trying. Talent wins games, but teamwork and intelligence wins championships."
– Michael Jordan
What To Do if You Didn’t Receive Your W-2
If you don’t receive your W-2 or 1099 by January 31 of the year, you are filing taxes, or if the information on these forms is incorrect, contact your employer/payer. If you still haven’t received the forms you need by the end of February, you can contact the IRS at 800-829-1040, and they may be able to help.
When you contact the IRS, they will also reach out to the employer/payer for the information you need, and they will also send you Form 4852, which is a substitute for a W-2 or 1099. To do this, they will ask for your employer/payer’s name, address, and phone number (as well as your information).
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
How to Make Hummus
Hummus is a dip made primarily from garbanzo beans and is great on pita bread, veggies, or chicken. Here’s how to make hummus:
Tip adapted from Inspired Taste7
There is a 5-letter, single-syllable word that you can take 4 letters out of, leaving you with only a single letter that has the same pronunciation as the original 5-letter word. What is this word? (Hint: it involves waiting in line.)
Last week’s riddle: There are 2 nouns in the English language that become men’s names when you capitalize them – and when you capitalize them, you alter their pronunciation. Name either or both of these 2 nouns, both of which end in ‘b’. Riddle Answer: Herb and Job (herb and job).
Paragliders above Lake Achen, Tyrol, Austria
Footnotes and Sources
2. The Wall Street Journal, June 3, 2022
3. The Wall Street Journal, June 3, 2022
4. CNBC, June 3, 2022
5. CNBC, June 3, 2022
6. IRS.gov, January 13, 2021
7. inspiredtaste.net, February 22, 2022
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Weekly Market Insights: Stocks Slip on Mixed Economic News
June 06, 2022