Correction and contraction….
Investing during 2022 has been like running a forest trail and having unexpected obstacles appear every so often – a fallen tree, a swarm of biting flies, a bear with cubs – you get the idea. To-date, economic, coronavirus-related, and geopolitical events have taken a toll from stock and bond markets, as well as the U.S. economy. For example:
Recession fears were top-of-mind last week when the Bureau of Economic Analysis reported that U.S. gross domestic product (GDP) – the value of all goods and services produced in the country – contracted 1.4 percent during the first quarter of 2022. Greg Daco, chief economist of EY-Parthenon, wrote in Barron’s:
“To the untrained eye, such a GDP contraction would raise concern that the economy is headed toward a recession…paradoxically, the main reason GDP contracted in Q1 is that the U.S. economy grew faster than its peers. Robust private sector activity driven by solid consumer outlays, accelerating business investment, and inventory restocking pulled in imports at an extremely rapid pace while a sluggish global economy meant exports fell back.”
Major U.S. stock indices fell last week. The Standard & Poor’s 500 and Nasdaq Composite Indices are in correction territory, down more than 10 percent for the year, and the Dow Jones Industrial Average is close to a correction, reported Ben Levisohn of Barron’s.
https://openknowledge.worldbank.org/bitstream/handle/10986/37223/CMO-April-2022.pdf [page 5]
https://fortune.com/2022/04/21/china-covid-lockdown-shanghai-port-supply-chain-backlog-container-ships/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Fortune_Chinas%20COVID-19%20Lockdown%20is%20Inflaming%20Worlds%20Supply%20Chain%20Backlog_3.pdf)
https://www.barrons.com/articles/recession-inflation-fed-soft-landing-51651183401 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Barrons_There%20Will%20Be%20No%20Soft%20Landing_4.pdf)
https://www.barrons.com/articles/yes-gdp-shrank-no-it-isnt-the-start-of-a-recession-51651259865 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Barrons_Yes%20GDP%20Shrank_6.pdf)
https://www.barrons.com/articles/stock-market-dow-nasdaq-sp-500-51651273777?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Barrons_The%20Stock%20Market%20Isnt%20Falling%20Like%20it%20Did%20in%201970s-Its%20Worse_7.pdf)
https://www.msci.com/end-of-day-data-search (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_MSCI_End%20of%20Day%20Index%20Data%20Search_9.pdf)
https://www.ft.com/content/6211eadb-c101-46d1-98b2-95347bd9d413 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Financial%20Times_Growth%20Stock%20Stars%20of%20Pandemic%20Tumble%20into%20Bear%20Market_11.pdf)
https://www.ft.com/content/cb16a4d0-dfcc-4ae1-ad97-a962f24640d6 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/05-02-22_Financial%20Times_The%20Death%20of%20the%20Growth%20Vs.%20Value%20Stock%20Debate_13.pdf)
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