The Markets (as of market close August 12, 2022)
The stock market posted its fourth straight weekly advance, the longest consecutive weekly rally of 2022. Investors turned to stocks on the premise that the Federal Reserve may reduce the pace of its economic tightening campaign after three major indicators showed that inflation subsided in July. With this week’s performance, the S&P 500 has recouped half of its losses from the beginning of the year. The Nasdaq has risen over 20.0% from its low in June. With corporate earnings season about finished, traders are now assessing the direction of the economy. Even if the Fed continues its hawkish push to get inflation down to the 2.0% target, the economy has thus far been resilient, with the labor market continuing to show strength while corporate earnings have been generally positive. Crude oil prices have remained under $100.00 per barrel for three weeks, gold prices have nearly recovered all their losses from the beginning of the year, and consumer sentiment is on the rise. By the end of last week, each of the benchmark indexes listed here climbed by at least 2.9%, led by the Russell 2000, which rose nearly 5.0%. Ten-year Treasury yields broke even, crude oil prices increased nearly 4.0%, gold prices advanced about 1.5%, and the dollar slipped marginally.