Stocks moved lower last week as recession fears deepened following a Fed hike in interest rates and weak economic data.
The Dow Jones Industrial Average fell 4.79%, while the Standard & Poor’s 500 dropped 5.79%. The Nasdaq Composite index slid 4.78% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 4.51%.1,2,3
Stocks were under pressure all week due to inflation worries, higher yields, and rising recession concerns. In advance of the much-awaited mid-week meeting of the Federal Open Market Committee (FOMC), bond yields jumped, and stocks retreated on speculation that the Fed might raise rates by 75 basis points. When the Fed announced a 75 basis point hike on Wednesday, stocks rebounded strongly.
The enthusiasm was short-lived. Stocks resumed their slide on Thursday as global central banks followed with their own rate hikes. Recession fears grew based on a weak housing starts report and a contraction in the Philadelphia Fed Business Index–the first contraction since May 2020.4
Fed Rate Hike
The Federal Reserve announced a 0.75% hike in the federal funds rate, making it the biggest rate increase since 1994 and signaling its commitment to address inflation. The report from last week’s FOMC meeting also indicated new rate projections, showing that all members expect rates to rise to at least 3.0% by year-end, with half the members expecting rates to rise to 3.375%.5
The 75 basis point rate increase was a late-developing change from earlier Fed guidance of a 50 basis point increase. The change of heart was in response to recent inflation data and rising inflationary expectations.6
This Week: Key Economic Data
Tuesday: Existing Home Sales.
Thursday: Jobless Claims. Purchasing Managers’ Index (PMI).
Friday: New Home Sales. Consumer Sentiment.
Source: Econoday, June 17, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Lennar Corporation (LEN).
Wednesday: KB Home (KBH).
Thursday: FedEx Corporation (FDX), Darden Restaurants, Inc. (DRI).
Source: Zacks, June 17, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Wealth Watch: Rates on the Rise and the HCM Cash Buildup Continues
The Federal Reserve did raise interest rates by .75 percent this afternoon, and this is a welcome event. This is the first time there has been any real meaningful move to slow the rise in inflation. This market is looking for leadership from the White House, the Fed and the...[READ MORE]7
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice.
Things You Can Do on the IRS Website
While the IRS website might not be in your top bookmarks, the website is helpful for a lot of things regarding taxes. Here are just a few things you can do on the site:
- Use Free File, where you can access brand-name tax software and online fillable forms.
- Use the IRS e-file system: a safe, easy, and common way to file your tax return.
- Check the status of your tax refund.
- Find out how to make payments electronically to pay your federal taxes. You can use a credit or debit card or enroll in the US Treasury’s Electronic Federal Tax Payment System to pay your taxes.
- Get tax forms and publications, including helpful tips for frequently asked questions.8
* 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.
Improve Your Swimming with Masters Swim
Swimming is a fantastic full-body, low-impact workout for people of all ages. Check out US Masters Swimming for a club near you as the weather warms up! USMS is an organized swimming club for swimmers of all levels. Swimming with a Masters club is a great way to build camaraderie, meet new friends, get better at swimming, and enjoy a great workout. There are clubs all over the country, likely at a pool near you, which you can find through the Club Finder tool on the USMS website. The coaches will help you start (and stick with) a swimming routine, improve your stroke, and learn more about the sport.9
Summer Squash Salad with Avocado & Pine Nuts
- ¼ cup pine nuts
- 1 ¼ lbs baby summer squash (zucchini, yellow sqash, etc.)
- 2 tbsp extra virgin olive oil
- 1 large lemon, juiced
- 2 small avocados
- 1 small block ricotta salata cheese
- fresh chives
- flaky sea salt
- freshly cracked black pepper
- extra virgin olive oil, to drizzle
- In a small sauté pan, add the pine nuts over low heat. Toast until golden and fragrant, stirring often (watch closely so they don’t burn). Transfer the pine nuts to a plate and let cool.
- Slice the ends off the baby squash. Using a mandolin, slice the squash into very thin rounds (adjust the settings until you get a piece of squash that is almost paper thin, but still holds it shape and has a nice bite). You want about 1 pound of sliced squash total.
- Combine the squash, olive oil, and lemon juice in a large bowl. Toss well and let sit for 10 minutes to marinate. Cut the avocados into chunks, add them to the bowl, and gently toss to combine.
- Spoon half of the salad out onto a large plate or platter. Season well with flaky sea salt and freshly cracked black pepper. Spoon out the rest of the salad.
- Crumble the ricotta salata into small chunks and sprinkle over top. Cut the chives into ½” pieces (if thin) or chop the chives (if thick). Sprinkle the chives over top, along with the pine nuts.
- Drizzle more olive oil. Season again with flaky sea salt and freshly cracked black pepper.
Footnotes and Sources
1. The Wall Street Journal, June 17, 2022
2. The Wall Street Journal, June 17, 2022
3. The Wall Street Journal, June 17, 2022
4. CNBC, June 16, 2022
5. The Wall Street Journal, June 15, 2022
6. The Wall Street Journal, June 15, 2022
7. howardcm.com, June 15, 2022
8. IRS.gov, March 20, 2020
9. usms.org, February 22, 2022
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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