Markets bounce back with job report surpirse

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February 7, 2022
  • Global equity markets were up across the board last week. We saw global markets (represented by the MSCI All Country World Index) up 2.0% and domestic stocks (represented by the S&P 500 Index) up 1.6%. It was both developed international (represented by the MSCI EAFE Index) and emerging markets (represented by the MSCI Emerging Markets Index) leading the way as both were up over 2% for the week.
  • Last Monday was the final trading day for the month of January. For the first month of 2022, global markets (represented by the MSCI All Country World Index) were down -4.9% while U.S. bonds (represented by the Barclays US Aggregate Bond Index) were down -2.2%.
  • The labor market continued its strength in January, according to the recently released Labor Department report. It was announced that the U.S. economy added 467,000 jobs for the month and unemployment held steady at 4.0%.
  • Oil prices continue to rise as U.S. crude rose above $90 per barrel.
  • All eyes will once again be on the monthly inflation report. On Thursday this week, the U.S. Bureau of Labor Statistics will release the January monthly consumer price index report. With inflation in the crosshairs of the Federal Reserve, the report will have some influence on interest rate expectations.
  • Corporate earnings have been very strong so far as about 56% of S&P 500 companies in the U.S. have announced. Coming into the year, the expectation was for a 21% earnings growth rate for the fourth quarter. So far, that estimate has been revised upwards to 29% as many earnings reports have surprised to the upside. All of this is according to FactSet. Corporate earnings continue to be one of the brightest spots of the economy.
  • I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.

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Author

Mike heads the internal Investment Committee that is responsible for the investment direction of the firm. He works closely with Diversified’s financial planners to support the investment side of the lifelong financial planning process. Lastly, it’s Mike’s responsibility to oversee the ever-changing global investment landscape and work with the planners to evaluate the impact on each of our client’s strategies.

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