Our 2022 Mid-Year Market Update

By Brett Gottlieb

Did you think the unpredictability of the last two years would be over by now? Unfortunately, 2022 has proved itself to be one of the most unpredictable years of this last decade. With a global pandemic still raging on in some parts of the world, a war in Ukraine, an out-of-control housing market, and rampant inflation, there is good reason for many to have concerns about the state of the economy.

While there are still many unknowns, we’d like to take the time to reflect and review what’s happened so far in 2022 and what you can expect going forward.

Stock Market Performance

It’s no secret that the stock market has seen increased volatility in the last couple of months—partly due to the uncertainty surrounding the war in Ukraine and partly due to the continued effects of historically high levels of inflation.

In the last 6 months, all three indices experienced significant declines: the S&P 500 fell almost 12%, the Nasdaq fell more than 22%, and the Dow fell nearly 8%.[1] Big tech stocks bore the brunt of the declines[2] as many experts wonder if the bubble surrounding this industry is about to pop.

This year has seen concerns regarding the global economy reach new highs as many countries struggle in different ways:

  • The ongoing COVID-19 surge in China has prompted fresh rounds of lockdowns and stifled economic growth.[3]
  • The possibility of nuclear war in the conflict between Russia and Ukraine has many worried.[4]
  • High inflation in the U.S. is reducing demand for everyday goods and could send the economy into a recession.[5]

There’s no way to know exactly how all these events will unfold, but the best thing we can do is to keep calm throughout the storm. Stock market volatility, and even recessions, are normal parts of the economic cycle, and sticking with a tried-and-true investment strategy is the best way to navigate uncertain times.

Employment Levels

Employment levels have steadily been returning to pre-pandemic numbers, with the May 2022 unemployment rate remaining at 3.6%, unchanged from April. This number, about 6 million people, is similar to the February 2020 pre-pandemic rate of 3.5%, or 5.7 million people.[6]

The payroll employment sector also saw an increase of 390,000 jobs in May, adding gains to the leisure and hospitality, professional services, retail, and manufacturing industries.[7] With these revisions, employment in February and March combined is 39,000 lower than previously reported, suggesting to many experts that the economy as a whole will continue to grow despite high inflation.

Interest Rates and the Federal Reserve

In response to surging inflation, the Federal Reserve raised interest rates by .25% in March and then by .50% in May, which marked the single largest rate hike since 2000[8] and the first rate hike since December 2018.[9] The Fed has promised to raise rates throughout the remainder of 2022.

There is much debate over how much rates should rise in order to effectively combat inflation. Too much of a rise could halt economic recovery, whereas too little could keep inflation rampant and send the economy into a recession. Many experts agree that the Fed still needs to do more to combat inflation.[10]

What Does This Mean for You?

Although we can’t fully know what lies ahead, don’t let that prevent you from taking the steps to protect yourself and pursue financial freedom. At Comprehensive Advisor, we can help you navigate your financial challenges and opportunities with confidence. To learn more about our 2022 outlook and how we can help you, email us at info@ComprehensiveAdvisor.com or call (760) 813-2125.

About Our Advisors

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees in Business Administration and Economics. Brett is Life Insurance licensed in several states. He is passionate about guiding his clients on retirement income planning, helping each client pursue their specific retirement goals and defending the assets his clients have worked so hard to achieve. Brett is a California native and currently resides in San Elijo Hills with his beautiful wife and three children.

With a combined experience of over three decades in the financial services industry, our advisors hail from some of the largest independent broker/dealers and banking institutions in the country. They have dedicated their professional careers to creating personalized financial solutions for individuals and families who seek successful retirement planning and currently offer investment advisory services through AE Wealth Management, LLC. Our advisors take a common-sense approach to the planning process and work with clients to create a retirement road map to help ensure their assets are protected and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County and beyond. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Comprehensive Advisor are not affiliated companies. C.A. Financial & Insurance Services. Investment advisory services made available through AE Wealth Management, LLC (AEWM). AEWM and Comprehensive Advisor, LLC are not affiliated companies. C.A. Financial & Insurance Services, CA Ins. Lic. #6000262. This material is intended to provide general information and is believed to be reliable, but accuracy and completeness cannot be guaranteed. Neither the firm nor its representatives may give tax or legal advice. Investing involves risk, including the potential loss of principal. Any references to protection benefits, safety, security, lifetime income, etc. generally refer to fixed insurance products, never securities or investment products. 1366002-06/22

[1] https://www.google.com/finance/quote/.DJI:INDEXDJX?hl=en&window=6M

[2] https://money.com/why-are-tech-stocks-down-2022/

[3] https://www.reuters.com/business/chinas-zero-covid-policy-dashes-global-hopes-quick-economic-return-normal-2022-05-19/

[4] https://www.cnbc.com/2022/04/26/russia-ukraine-live-updates.html

[5] https://www.theatlantic.com/ideas/archive/2022/03/inflation-federal-reserve-recession/627079/

[6] https://www.bls.gov/news.release/empsit.nr0.htm

[7] https://www.bls.gov/news.release/empsit.nr0.htm

[8] https://www.wsj.com/livecoverage/federal-reserve-meeting-inflation-rate-may-2022

[9] https://www.cnbc.com/2022/03/16/federal-reserve-meeting.html

[10] https://www.reuters.com/business/finance/feds-racing-raise-rates-how-high-remains-an-open-bid-2022-04-28/


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