Week of May 2, 2022

It was another wild ride in the stock market last week with the Dow Jones Industrial Average, S&P 500 Index and NASDAQ posting negative returns of 2.47%, 3.26% and 3.93% respectively.  For the month of April all major indices were down with the Nasdaq being hit the hardest, posting a negative return of 13.26% and the Dow down 4.82% and the S&P 500 down 8.72%.

U.S. Treasury yields increased to close the week at 2.928% for the 10-Year Treasury after the Personal Consumption Expenditure Price Index reported a year over year increase of 5.2%.  In April the 10-Year Treasury has increased 23.3%. 

Fears of recession surfaced when the U.S. Gross Domestic Product for the first quarter declined at a 1.4% pace, below the expectations of a 1% gain.  A recession is defined as two consecutive quarters of negative GDP.  While this is the initial reading, there will likely be a revision and may influence the Fed’s decision on whether to implement a .50% rate increase at the upcoming meeting. 

This week the Federal Open Market Committee will be meeting on Tuesday and Wednesday.  Along with rate hikes the Fed is set to discuss reducing the amount of bonds it is holding. 

The Covid vaccine for children under 6 is ready to be reviewed by the Food and Drug Administration.  Moderna is expected to be cleared first, while Pfizer is set for June.