Weekly Market Commentary: Markets Tap Brakes, But Hold Fast Against Downbeat News

The Week on Wall Street

Stocks tumbled on Friday, sending stocks to a weekly loss after an otherwise quiet August week of trading.

The Dow Jones Industrial Average slipped -0.16%, while the Standard & Poor’s 500 lost 1.21%. The Nasdaq Composite index declined 2.62% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 0.88%.1,2,3

Summer Rally Hits Pause Button

The market rally that began in mid-June paused last week. Despite the week’s losses, stocks exhibited resiliency in the face of a string of troubling economic news that included flat retail sales, weak housing numbers, an inversion in the yield curve, and tepid economic data out of China.



Nevertheless, stocks tumbled on Friday amid hawkish comments about future rate hikes, rising bond yields, and ahead of the annual meeting of global central bankers in Jackson Hole, Wyoming, in which Fed Chair Jerome Powell is scheduled to speak on August 26th.

Expect More Rate Hikes

Minutes from July's Federal Open Market Committee meeting indicated that additional rate hikes would be needed to help manage inflation. Fed officials did acknowledge that further rate hikes risked unintended economic weakness because of the time it takes for higher rates to work through the economy. The committee indicated that they might slow rate hikes to determine the impact of previous rate increases.4

The minutes also contained the Fed's latest economic forecasts, which projected inflation to decline faster than its June estimate due to a bigger economic slowdown in the year's second half.5

This Week: Key Economic Data

Tuesday: Purchasing Managers’ Index (PMI) Composite Flash. New Home Sales.
Wednesday: Durable Goods Orders.
Thursday: Jobless Claims. Gross Domestic Product (GDP).

Source: Econoday, August 19, 2022 - The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Monday: Palo Alto Networks, Inc. (PANW), Zoom Video Communications, Inc. (ZM).
Tuesday: Intuit, Inc. (INTU).
Wednesday: Nvidia Corporation (NVDA), Salesforce, Inc. (CRM), Snowflake, Inc. (SNOW).
Thursday: Marvell Technology, Inc. (MRVL), Dollar General Corporation (DG), Dell Technologies, Inc. (DELL), VMware, Inc. (VMW).

Source: Zacks, August 19, 2022 - Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

1. https://www.wsj.com/market-data
2. https://www.wsj.com/market-data
3. https://quotes.wsj.com/index/XX/990300/historical-prices
4. https://www.wsj.com/articles/fed-officials-see-need-for-continued-interest-rate-increases-but-less-certainty-over-destination-11660760110
5. https://www.wsj.com/articles/fed-officials-see-need-for-continued-interest-rate-increases-but-less-certainty-over-destination-11660760110

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. 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.