By Tim Courtney, Chief Investment Officer
So far, 2022 has seen an increase in market volatility and the first correction in two years.1 It’s not nearly as easy an environment as investors experienced in 2021, but we expect things to settle somewhat as we move from the first half to the second half of the year.
Now that the first quarter has come to a close, here are three factors we’ll be watching for in the second quarter:
While investing always entails risks, these are elevated following the easy environment in 2021 that featured low interest rates, high valuations, strong GDP and consumer spending. Changing that scenario to include a war in Europe, rising interest rates and higher inflation means that returns won’t be generated so easily. If full year earnings come close to hitting their current estimates, markets should end the year on a positive note. Even with the challenges, there seems to be enough momentum in the economy and household financial health to continue growth and set a new earnings record in 2022.
The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. There is over USD 9.9 trillion indexed or benchmarked to the index, with indexed assets comprising approximately USD 3.4 trillion of this total. The index includes 500 leading companies and covers approximately 80% of available market capitalization.
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