Charles-Henry Monchau

Chief Investment Officer





The major US equity indexes endured a 4th consecutive week of losses, as disappointing earnings results from (-14%) and growth fears weighed. The S&P 500 Index closed at the lowest level of 2022, down roughly 14% from its recent peak. Meanwhile, the Nasdaq Composite and small-cap Russell 2000 Index fell further into bear markets, down roughly 24% from their highs. Energy stocks outperformed within the S&P 500 after Russia announced that it was cutting off natural gas exports to Poland and Bulgaria. The week’s economic data increased “stagflation” risk as US GDP for 1Q contracted at an annualized rate of 1.4%, well below consensus expectations of a roughly 1.0% expansion, while the yoy headline PCE measure advanced to a 40-year high of 6.6% (but missed estimates). After decreasing early in the week, the yield on the US 10-year ended near where it began. In Europe, equities pulled back on concerns about slowing economic growth, high inflation, and tightening monetary policy. Encouraging quarterly earnings reports and French President Macron being reelected may have helped to moderate these losses. Core eurozone bond yields fell, as mounting concerns about inflationary pressures and weakening economic growth appeared to increase demand for high-quality government bonds. Stocks in Japan fell over the week. The BoJ’s “uber dovish” decision sent the yen near a 20-year low of JPY 130.39 against the U.S. dollar, compared with the prior week’s JPY 128.47.




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