General Market Commentary as of March 31, 2022
The first quarter gave back some of the recent returns with the major indices posting negative numbers for the quarter. The S&P 500 ended the quarter down -4.95%, the Dow Jones Industrial Average was off -4.57%, and the Nasdaq Composite lost -9.10%. The US equity market posted negative returns for the quarter and underperformed non-US developed markets, but outperformed emerging markets. Value outperformed growth and large caps outperformed small caps. For the quarter, interest rates increased across all maturities in the US Treasury market as well as the global developed markets.
The conflict in Ukraine created both an immediate shock and is creating lasting impacts on the global economy. We’ve witnessed citizens fleeing into neighboring countries and numerous commodities rise in price. We’ll likely see changes in government spending priorities as foreign policy alliances and partnerships could be revamped down the road. The sanctions placed on Russia, including their removal from the global banking system, has the global economy trending towards deglobalization. The pandemic exposed a variety of supply chain issues and now the ongoing conflict is exposing even more as we face shortages and price increases.
Last quarter we referenced the Fed would likely act to tackle inflation. Last month, the Fed increased the Fed Funds Rate 0.25%, the first increase since 2018. They also signaled its intention of raising it another handful of times this year as well as next year. The annual change in the cost of living as measured by the Consumer Price Index rose to 8.5% for the 12-month period ending in March. This is the largest 12-month increase since the period ending December 1981. Even against the backdrop of favorable employment numbers as of late, many Americans are feeling the impact of the widespread price spikes.
Market Recap
| Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
|---|---|---|---|---|---|
| S&P 500 | -4.95% | 14.03% | 16.92% | 13.91% | 4,530.41 |
| Dow Jones Industrial Average | -4.57% | 5.14% | 10.18% | 10.01% | 34,678.35 |
| NASDAQ Composite | -9.10% | 7.35% | 22.53% | 19.19% | 14,220.52 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.
