Market Recap Week of 4/04/2022 Through 4/08/2022 – Daily Flash Briefing

The S&P 500 index slipped 1.3% last week amid concerns about monetary tightening and upcoming Q1 earnings reports.

This puts the index in negative territory for the month of April to date after the S&P 500 just achieved its first monthly increase of 2022 in March. It is still down 5.8% for the year to date.

Last week’s decline came amid jitters about the potential economic impact of the Federal Reserve’s Federal Open Market Committee undergoes a more aggressive monetary tightening plan than previously anticipated.

Tuesday, Federal Reserve governor Lael Brainard said the central bank’s policy-setting committee will be “starting to reduce the balance sheet at a rapid pace as soon as our May meeting.” Wednesday, minutes released from the committee’s March meeting showed officials were considering raising rates by a half-point before they ultimately decided on a quarter-point increase. These were seen by investors as signs the Fed’s tightening plan may end up more aggressive than previously expected.

The week’s drop also comes ahead of the start of US companies’ financial results for Q1, a tumultuous quarter that was dominated by headlines about COVID-19, Russia’s attacks on Ukraine, inflation and supply-chain issues. Many investors are trading cautiously ahead of the reports.

By sector, the technology and consumer discretionary sectors had the largest percentage drops of the week, down 4% and 3.3%, respectively. Other sectors in the red included communication services, industrials, financials and materials.

Still, the health care sector climbed 3.4%, followed by a 3.2% increase in energy, a 2.7% gain in consumer staples and a 1.9% boost in utilities. Also in the black, real estate edged up 0.8%.

Next week, the US companies expected to release quarterly results include JPMorgan Chase (JPM), Delta Air Lines (DAL), Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C) and UnitedHealth Group (UNH).

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