Spring has sprung and it’s hard to believe summer is fast approaching!
April’s stock market was all over the board, as investors weathered the fallout from an interest rate hike and ongoing disruptions in the food and energy sectors caused in part by the Russia-Ukraine war. It was an eventful month for two notable tech companies, as Twitter accepted billionaire Elon Musk’s offer to buy the company, while Netflix shares dropped after announcing disappointing subscriber growth.
Elon Musk agrees to buy Twitter. The social media platform’s board of directors initially bristled at Musk’s takeover bid before changing their minds and accepting the tech titan’s $44 billion offer. Musk, whose frequent tweets are followed by nearly 84 million Twitter users, plans to take the company private. Critics complain that Musk’s less restrictive view on content moderation will open the door to toxic contributors, sending users running for the exits and potentially endangering advertising revenue. Proponents of the deal cite Musk’s track record of challenging conventions to improve products, an approach they feel will help Twitter remain competitive.
Netflix stock price crashes -35% in a day. Traders punished the streaming giant after the company announced the loss of 636,000 subscribers in the United States and Canada last quarter (global subscriptions were down 203,000 for the quarter). The drop represents about a -1% fall in global subscriber figures, quarter-over-quarter. Netflix also announced plans to crack down on password sharing and add a new advertising-based subscription tier in the next year or two.
Crude oil prices moderate. After spiking to nearly $125/barrel, oil prices (as measured by WTI Crude) have slipped below $100/barrel as of this writing. Gas prices have followed suit, retreating from previous highs to around $4/gallon nationally. It’s too soon to tell if this recent pullback indicates a return toward gas’s 52-week average price of $3.35/gallon. Fingers crossed!
Kickoff to next season. Georgia’s Travon Walker was the first overall pick in the annual National Football League (NFL) Draft, held in Las Vegas this year. While first-round picks generate the most buzz, the real focus should be on players selected in the middle of the second round - at least according to Richard Thaler, who won a Nobel Prize for his work in behavioral economics. Read his blog about the intersection of game theory and player selection in the NFL Draft.
We’re grateful to be part of your financial coaching team. If there’s anything you need, please schedule some time with our office.
All three indexes stumbled in April, as the anticipated interest rate hike and geopolitical concerns weighed down markets. The tech-heavy NASDAQ 100 fell more than 13% in April alone, and is down 21% since January.
While moderating oil prices deflated Energy stocks by about 1.5% for the month, the sector still leads year-to-date, clocking in up nearly 40% so far. Consumer Staples – containing stocks like Procter & Gamble, Coca-Cola, and Costco – was the lone sector with positive returns in April and one of three sectors up year-to-date.
Bonds face headwinds for the foreseeable future, as inflation and the Federal Reserve’s aggressive interest rate policy take center stage. April’s negative performance simply added to an already-challenging year for bonds.
US economy remains strong. The economy continues to show signs of strength in key areas:
US GDP Drops Q1 2022
The US economy contracted by 1.4% through Q1 2022, its first contraction since the early month of the COVID-19 pandemic, as measured by Gross Domestic Product (GDP). GDP is made up of four big components: consumption by households, investment by businesses, government spending on goods and services, and net exports.
According to Barrons, the surge in imports and trade deficit was the biggest factor behind the GDP drop, as Americans began buying more goods from overseas markets, followed by a reduction in government spending. That could be a sign that the U.S. economy has recovered more rapidly than others around the world, not necessarily a harbinger of future economic distress.
"It Can't Tell Me What to Do"
Cancer survivor to run 600th marathon: 'It can't tell me what I can do'
Tom Perri has run more than 70 marathons since his stage 4 cancer diagnosis two years ago
THOUGHT FOR THE MONTH
Dow Jones Industrial Average: The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
Dow Jones U.S. Real Estate Total Return Index: The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.
NASDAQ Composite: The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.
S&P 500 Bond Index: The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.
S&P 500 Consumer Discretionary: The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.
S&P 500 Consumer Staples: The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.
S&P 500 Energy: The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.
S&P 500 Financials: The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.
S&P 500 Index: The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.
S&P 500 Utilities: The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.
S&P U.S. Aggregate Bond Index: The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.
S&P U.S. Treasury Bond Index: The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.
PLEASE NOTE: When you link to any of the websites displayed within this email, you are leaving this email and assume total responsibility and risk for your use of the website you are linking to. We make no representation as to the completeness or accuracy of any information provided at these websites.
A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect again loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.
The statements provided herein are based solely on the opinions of the Advisor Group Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Advisor Group or its affiliates.
Certain information may be based on information received from sources the Advisor Group Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Advisor Group Research Team only as of the date of this document and are subject to change without notice. Advisor Group has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Advisor Group is not soliciting or recommending any action based on any information in this document.
Securities and investment advisory services are offered through the firms: FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., Triad Advisors, LLC, and Woodbury Financial Services, Inc., broker-dealers, registered investment advisers, and members of FINRA and SIPC. Securities are offered through Securities America, Inc., a broker-dealer and member of FINRA and SIPC. Advisory services are offered through Arbor Point Advisors, LLC, Ladenburg Thalmann Asset Management, Inc., Securities America Advisors, Inc., and Triad Hybrid Solutions, LLC, registered investment advisers. Advisory programs offered by FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc., are sponsored by VISION2020 Wealth Management Corp., an affiliated registered investment adviser. Advisor Group, Inc. is an affiliate of these firms.
A Bumpy April for Stocks and Bonds
May 09, 2022