Recently, the financial markets have made their own U-turn, pivoting from their bearish path to post broad based gains across stocks and bonds for the week ending June 24.
U.S. stocks posted their first weekly gain in June. Prospects for aggressive rate hikes were tempered by slowing economic data.
Remember way back when owning FAANGs was a badge of honor? Yes, a mere six months ago. Now FAANGs are a source of scorn. What happened? The Fed made an aggressive policy U-turn, raising interest rates and withdrawing liquidity from the economy and markets.
U.S. stock markets retreated for the week and the S&P 500 index slipped into bear market territory. The FOMC raised interest rates 75 basis points (bp), raising fears that a policy mistake could push the economy into recession.
The erstwhile, extraordinary bull market advanced on a tailwind of low, short-term interest rates and massive Federal Reserve purchases of longer-maturity debt securities intended to stabilize long-term rates, referred to as “quantitative easing.”
Jay Powell, the Federal Reserve chairman, was king for a day with his aggressive 75 basis point (bp) increase in the Fed funds rate. This was the biggest jump since 1994, when Alan Greenspan chaired the Fed.
Floating-rate income and the secured nature of senior loans may provide a valuable defense against both rising rates and higher default risk for investors able to stomach short-term volatility.
We believe Voya’s large cap value discipline, which focuses identifying companies with attractive excess capital yield, is a more dynamic and effective valuation mechanism to drive a value strategy, particularly in today’s market uncertainty.
Bitcoin, which started the whole cryptocurrency phenomenon, is now in free fall, having dropped more than 50% year to date to $21,870 as of Tuesday’s close ― below my bearish forecast of $25,000.
U.S. stock market indexes lost ground for the week and volatility spiked. Investors’ hopes for easing inflation were dashed by a surprise CPI jump, rising borrowing costs and new Covid restrictions in Shanghai.