Last week’s Market Recap:
- The S&P 500 was up 6.46% for the week. Year-to-date the index is down -17.31%.
- NASDAQ closed the week up 7.51% and is down -25.52% YTD.
- 10-Year Treasury Rate increased, ending the week at 3.13% from 3.25% the prior week.
- Fed Funds Target range of 1.50%-1.75%
The week ahead, 6/27:
- Headline and Core PCE (Personal Consumption Expenditures)
- Case-Shiller Home Price Index
- Personal income and spending
Manufacturing as well as services sector data out last week confirmed weakening in the economy and increased the odds of a U.S. recession; however, there are few signs of weakening in the labor market. It’s challenging to conclude we’re on the brink of recession with so many jobs available. If we are entering (or already in) a recession, there’s no reason to expect that it will be nearly as severe as the last two. Since the economy spends the majority of the time in expansion, for long-term investors, it is ultimately more important to be well-positioned for expansions versus attempting to trade around recessions.
As you can see in the following chart, the stock market and economy are not always in sync. Sometimes the stock market does very well during a recession. Most of the time, it does very well after the recession is over:
Feel free to reach out with any questions.
CRA Investment Committee
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