Market monitor: Dismal first half for stocks

Investors focused on impact of rate hikes

Growing fears of recession triggered by aggressive central bank monetary tightening, including rapidly rising interest rates, continued to weigh on stock markets, which ended last week with losses on the week, month, quarter, and first half. U.S. stock markets are firmly in bear market territory, while the Canadian stock market languishes in correction.

Manufacturing activity has slumped in both the U.S. and the eurozone. Traders see little hope of respite anytime soon and continue rotating away from growth sectors, such as information technology, into more defensive sectors and value stocks. However, the benchmark U.S. 10-year Treasury bond yield slipped back from its recent highs, to 2.889%, as bond traders see the Fed’s hawkish monetary policy dampening inflation back to the Fed’s 2% target.

The S&P 500 Composite Index posted a 2.2% loss for the week last week, for an 8.4% loss in June overall, and a 16.7% retreat in the second quarter. The Nasdaq Composite Index fell 4.1% last week, finishing June with a 8.7% loss for the month, and a 22.7% loss for the second quarter. Toronto’s S&P/TSX Composite Index took less of a hit, edging down 1.1% on the week but deepening the overall loss ofr June at 9.0%, and remaining in correction territory with a retreat of 13.8% for the second quarter.

Crude oil gained 1.3% on the week, but retreated 7.8% in June, for a 5.5% advance overall in the second quarter. Gold continued easing back in all time periods, slipping 1.5% on the week, 2.2% for the month, and 7.5% for the second quarter.

Monitor the main stock and commodity indexes daily with the Fund Library’s interactive Markets Page.

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Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.