A Rare Phenomenon in Stocks and Bonds, Mortgage Rates Still Rising, China’s Lockdown is Taking Its Toll
May 6, 2022 | FIRESIDE CHARTS
The widely awaited FOMC (Federal Open Markets Committee) meeting has come and gone. The FOMC raised the Federal Funds rate by 50 basis points (0.50%) and announced plans to reducing the Federal Reserve’s securities holdings. April was an anomalous month for both stock and bond returns. The Nasdaq 100 had its worst month since 2008. Mortgage rates continue to rise with no price relief in sight putting a question mark on a large source of economic activity. Gasoline prices have stabilized but the same can’t be said for diesel. A tale of two cities.
1. Only a handful of months have been worse for stocks or bonds, but negative returns of this magnitude in both asset classes has been extremely rare:
Source: Allianz Global Investors
2. Perhaps there is some value in beaten down technology stocks:
Source: The Daily Shot from 5/2/22
3. This is the largest year-over-year decrease in affordability in at least 30 years:
Source: Black Knight
4. Just over half of Residential U.S. Private Construction Spending is on the construction of new single-family homes:
Source: Chart and data provided by Macrobond
5. Higher diesel prices are putting a squeeze on the shipping industry:
Source: The Daily Shot from 5/1/22
6. The Chinese economy is struggling under the government’s zero Covid policy:
Source: Bloomberg, Nevada Gaming Commission
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.