In this video Steve provides a recap of the stock market in April. He discusses investor sentiment, the S&P index PE ratio, and a new economic indicator.
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The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Wondering why the market rallied so much in March of 2022, how rising interested rates has historically affected the stock market, and which kind of investments have provided the greatest returns? Tune in for this month’s Stock Market Update with Steve Wolff as he answers these burning questions.
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WWM Financial is an SEC- Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where WWM Financial and its representatives are properly licensed or exempt from licensure. Investing involves risk and possible loss of principal capital. No advice may be rendered by WWM Financial unless a client service agreement is in place.
Full Transcription Below:
Steve Wolff:
This is Steve Wolff with the Monthly Market Report for March of 2022. Talk about March Madness. This is one of the weirdest months that I’ve seen in a long time. In the middle of March, things turned around for this market. Matter of fact, this market to me was bananas. Just bananas.
Steve Wolff:
What happened is, in the beginning of the month, the markets were going down and they were going down precipitously, as they had been doing for the first part of the year, especially the small stocks, especially the growth stocks.
Steve Wolff:
Well, March 15th came and the Ides of March I guess that must have done it for those of you who are Shakespeare aficionados, you’ll know what I’m talking about. For others of you, it was the middle of March, and the stocks wow they turned around. So before I get to all the things that happened in there, I want to give a little disclaimer here which we have to do for every one of these videos that we do.
Steve Wolff:
What I am about to say is strictly for informational purposes and it’s not meant to be recommendation. So before you buy or sell anything relating to anything I am saying about the markets or individual securities or maybe even the game that is going to be on tonight, be sure to consult your financial advisor. It’s probably best for your personal situation and you can make…he can make a recommendation or she can make a recommendation for you.
Steve Wolff:
By the way, there is a game tonight by the time you see this, this game will be over. But it’s March madness Kansas is playing against North Carolina and it is going to be a barn burner. In the meantime, what happened in March? For the month of March the S&P was up about 3.6%, the DOW was up about 2.2% and the NASDAQ was up about 3%.
Steve Wolff:
But for the quarter so January, February, March the S&P was down about 4.9%, the DOW was down about 4.6% and the NASDAQ was down about 9%. Now that only tells part of the story, because the small stocks and the growth stocks but especially the small stocks were down by a lot more. In the first quarter the Russel Growth 1000 which is a thousand stocks that were growth oriented were down about 9%. And the 2000, the Russel Growth 2000 stock index was down about 13%.
Steve Wolff:
Now the Microcap stocks based on the Russel Microcap Index was down about 15% for the quarter but both the Russel 2000 and the Microcap Russel Index were up about 1% for the month of March. So putting it, there’s a lot of statistics that I’m giving you. Putting it another way things were really coming down and then there was a rebound. Starting the middle of March a lot of these stocks came back.
Steve Wolff:
Here is something that, that’s an interesting statistic. At the lows the NASDAQ, the Russel 2000 which is small caps and the Microcaps were down a lot, and this is from their 52 week highs. The NASDAQ from its 52 week high which was around the middle of November and peaked out or you know valleyed out, whatever you want to call it, at 20% down in March. The Russel 2000 was down by about 23% and the small cap microcap index, Russel Index was down 25% from its high to its low. So they did make a nice rebound at the end of March.
Steve Wolff:
Fortunately that happened so the quarter itself really wasn’t as bad as it could have been. Dividend stocks were a great place to be and have been a great place to be and I think the fact that the dividends keep coming in they keep- A lot of companies keep raising their dividends has been a terrific thing to happen. In the meantime, Ukraine keeps going on as far as the war with Russia, there’s a lot of stuff going on there. Russia we thought, a lot of people thought would win that war in days we are now up to something like 40 or 45 days now since this started. And Russia is now pulling back a little bit. I think, from what I’m hearing, they may be regrouping who knows what’s going to happen again.
Steve Wolff:
Between that and inflation, the oil price has been up. It’s been a tough place for the individual small investor. Matter of fact I think the small guys are getting hurt a lot because I just filled up my car with gas and around here, even at Costco, the gas was about five dollars and 50 cents a gallon. So, that is hurting people. Also the FED in March started raising interest rates. How much that’s going to go from here I don’t know, how many times they are going to raise it I don’t know. But I would think it’s going to be a few times.
Steve Wolff:
Well between raising of interest rates and higher inflation, higher oil prices the little guy is really getting squeezed. The interesting thing that’s happening right now is the interest rate curve is starting to invert. In other words a normal curve is when rates are set the near-term rates are usually lower than the long-term rates because there’s more risk in the long term rates.
Steve Wolff:
But right now it looks like it’s starting to go another way. The two year bond is now actually higher than the ten year. So as far as interest rates are concerned that’s concerning for a lot of people, because when a curve gets inverted,a lot of times that means that there’s going to be a recession at some point in the future. Now it’s not a guarantee but it does happen. And it happens more often than not.
Steve Wolff:
Now what does that mean as far as the stock market is concerned? The interesting part about that, from an article that I just read, from the time that the yield curve actually inverts and we are still not quite there because the really short term treasuries are still lower than the long. So the curve is going in your direction this way, instead of this way. So, when it starts going the other way that’s when we are going to worry about it. The interesting thing about stocks is that it takes about seven months to maybe up to three years, from what I’ve just read, before we actually go into a recession.
Steve Wolff:
In the meantime, stocks have actually done well, historically, during the time from the time that rates invert to the time that the recession actually happens. My opinion is that a lot of the stocks, especially the growth and small stocks have already put in a pretty good sized loss and maybe the bottom, I think it could be the bottom where we hit in the middle of March. Doesn’t mean that stocks can’t pull back gain. But that was pretty significant for many, many stocks.
Steve Wolff:
The value stocks help up better, the dividend stocks held up better so we will see what happens. In the meantime whether we going to be in a bull or bear market obviously we’ve had a bear market in parts of the market, meaning bear market meaning things are down. The bull, from last time you saw me was down like this and he’s kind of sitting up again, who knows maybe we’ll get back to bull market who knows.
Steve Wolff:
I do have a fortune telling little crystal ball here that my wife gave me many years ago and it’s got a bull and a bear here. If I could look into it and really see what the future is going to be I could tell you, but it’s still kind of cloudy. But it does say something about Auntie Almond here and Dorothy and Kansas who is playing tonight in case I didn’t tell you that. You already know who won, but I’m rooting for Kansas so we will see what happens. In the meantime we’ll see what happens in April, I have no Idea what will happen in this month hopefully it will be a good month.
Steve Wolff:
By the way April is the best month of the entire year for stocks, historically. Now whether that happens this year or not, who knows. But April has always been a good month. Unless, you are paying a lot of taxes, which a lot of us are. In the meantime, I will see you next month where we will recap March. Now until then, happy investing.
Wondering why the Stock Market is so volatile? How stable the US Economy is and how potential conflict has influenced the stock market historically? Tune in to listen to Steve Wolff, Managing Partner at WWM Financial, give his perspective on what has occurred and how history can provide us a little insight.
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WWM Financial is an SEC- Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where WWM Financial and its representatives are properly licensed or exempt from licensure. Investing involves risk and possible loss of principal capital. No advice may be rendered by WWM Financial unless a client service agreement is in place.
What is happening with Russia, the stock market, and inflation? Is the stock market and economy still intact?
In this month’s Stock Market Update, Steve Wolff discusses what has occurred in January relating to the stock market, inflation, raising interest rates by the federal reserve, supply chain issues and much more.
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Learn 5 simple steps to avoid making bad investment decisions.
DISCLAIMER:
WWM Financial is an SEC- Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where WWM Financial and its representatives are properly licensed or exempt from licensure. Investing involves risk and possible loss of principal capital. No advice may be rendered by WWM Financial unless a client service agreement is in place.
In this stock market update, Steve Wolff (Managing Partner at WWM Financial) discusses what has occurred in December. He discusses Jerome Powell and the Fed’s stance on interest rates, Covid and its variants and how the market has reacted. He also discusses small cap stocks to large cap stocks, the unemployment rate, and the US economy.
FREE Report: 5 Investing Secrets Every Investor Needs to Know
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Click on the image above to watch December’s Stock Market Update.
Stock Market Update 12/3/2021
How has the market reacted because of Omicron? Is the stock market still goin up? Steve Wolff, Managing Partner at WWM Financial dives into what has occurred in November and where we are currently with the stock market.
Steve discusses Jerome Powell being re-elected, the Omicron variant, inflation and Moderna’s take on vaccines.
This is Steve Wolf with the November 2021 monthly review. Before we talk about what happened in November, let’s get some legal business out of the way. What I’m about to say is strictly for informational purposes only, and it’s not meant to be a recommendation. Before you buy or sell anything related to anything I’m saying about the markets or individual securities consult your financial advisor to make sure that it is appropriate for your personal situation.
All right, what happened in November 2021. As New York Yankees hall of Famer Yogi Barra once said, it’s deja vu all over again. A new variant to the COVID crisis is discovered and the stock market takes a dive. Where have we seen this before? While I was still recovering from my tryptophan coma from Thanksgiving when on Friday an South African official said there was a new strain of COVID 19 called Omicron. That was discovered that was enough to ruin the shorten Friday trading session as all the stock indices were down sharply for the day on that news.
Now on the last day of November, which was Tuesday, it looked like the markets were going to recover as the futures were showing a positive stock market. Then an article came out in the Financial Times that the CEO of Moderna, which is one of the companies that has been manufacturing the COVID vaccine and certainly is at the epicenter of all this, he basically said that due to the amount of spike protein mutations to the COVID 19 virus, and there’s currently about 32 of these, there is no way the current vaccines would work extremely effectively against the Omicron variant. Well, that was the match that lit the downward spiral in futures. And that worked its way sharply into a lower open on Tuesday.
But then the market started to recover and it looked like it was going to shake off the news, of course not so fast. Then Federal Reserve Chairman Jerome Powell poured gasoline on the fire somewhere around 7:30 AM, California time at the time I normally like to enjoy my breakfast. And he said in a Senate hearing that he was basically taking an about face in the policies he had championed for these many months. In a nutshell, here’s what he said. One, he’s considering ending the taper of asset purchases sooner than originally planned. Two, it’s time to stop using transitory when talking about inflation, which I kind of laugh at because we’ve been talking about that for two or three months now. He said that inflation is spreading, no big news there. The risk of higher and persistent inflation has increased, but he also said the economy is currently strong, but the Fed will use all of its tools to stop inflation. Well, this really spooked the bond market as treasury yield soared and stocks took a dive. That helped to make November a mixed, but mostly down month.
So let’s look at the scoreboard for November of 2021, the S&P was down about 1% for the month. The Dow Jones Industrial Average was down about 3.7% for the month. And the NASDAQ was actually up ironically, 2% for the month.
So what does all this mean for the future, at least for the near future? First, let’s talk about Omicron. Does anyone know how to pronounce this? It’s Omicron, Omicron, we’ll get it. It’s so new no one knows how to pronounce it. So let’s talk about Omicron. I’m certainly no doctor, and I’m not an epidemiologist, but from what I’ve read so far, the Omicron variant is highly contagious, but not nearly as deadly as some of the other variants that have been around. Hopefully it will mean the government will not lock down the economy again, but if the economy does slow because of the virus, this would put a little downward pressure on rising interest rates and inflation. So we’ll have to see what happens there.
Now, we haven’t talked too much about this supply chain bottleneck that’s still going on out there and it’s still a problem. But in time, as I’ve said before, I think this will dissipate and it will ease some of the inflationary pressures. On the other hand, food and gas prices have been up and gasoline and other fuel prices just continue to rise. And at the moment, I really don’t see a reason for it to fall, not at this point. And that’s going to keep some pressure on inflation. Labor is still an issue as companies cannot find enough workers for all the jobs that are out there right now. Now, many of the companies have increased the amount that they’re paying to their laborers. And in some of the cases they’re giving monetary incentives for people to come to work.
In any case, these rising costs will eventually have to be passed on to the consumer. So Powell does have a lot to worry about, and I think he’s going to have to walk a fine line when it comes to the velocity with which rates are increased. Now in the very near future, many of the growth stocks that have had an extended valuation, they’re giving back some of those gains. And I think you saw it yesterday and again today, December 1st as we’re recording this, it happened again today. And as you know, I’ve been saying that this might happen over the last couple of months in the commentaries that I’ve had. So I expected some sort of a short term downturn. So to me, this is not really a big surprise and it shouldn’t be to you. What has changed, however, is the commentary by the Federal Reserve. So growth stocks might be in the doghouse for a while, but we’ll just have to wait and see.
So that’s a wrap for the month of November. We’ll see you back here at the beginning of January when we start a new year and we’ll discuss what happened in the month of December, have a happy new year everyone.
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