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Positive performance was a rarity last week

Positive performance was a rarity last week. At the sector level, there was only one segment that managed to end the week higher, and for once, it wasn’t energy. Consumer Staples eked out the smallest of gains as it managed to close a third of a percentage point higher. The Market opened significantly lower at the start of the week as domestic equities continued the declines form the previous week. For the Nasdaq, Monday’s 4 percentage point decline marked the end of the largest three-day decline since March of 2020. Moreover, the current year-to-date decline in the Nasdaq stands as the worst start to the year since the inception of the index back in 1973. As many advisors have pointed out, just because an index begins the year with an initial loss or sees a drawdown midyear, it doesn’t necessarily mean that the index will close the year lower. Last week’s economic calendar held the results of the April Consumer Price index. Analysts expected a reduction in the inflation rate from the March reading of 8.6% to 8.1%. However, the headline number came back at 8.3%. This inflation number was buttressed the following day as the Producer Price Index came in at 11% year-over-year. Contact us today to learn more about how we can help you.

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Fifth consecutive week of losses for the S&P 500

The first week of May fumbled out of the gate with losses in all five of the major markets. This marked the fifth consecutive week of losses for the S&P 500. The week started promisingly enough as the market logged incremental gains on both Monday and Tuesday, ahead of the results of the May FOMC meeting. On Wednesday, the market surged higher following the results of the meeting. The biggest takeaway from the meeting was the 50-basis point increase in the Fed Funds Rate. This marked the largest monthly increase in 20 years as the Target rate now sits between 75-100 basis points. The market reacted favorably to the perceived dovishness after closing out the prior week with a sense of high probability of a 75-basis point increase at the June meeting. The S&P 500 rose over 3.5% on the news to close the day, yet the market reversed course Thursday as market participants appeared to rethink the market optimism from the prior day. To put the volatility into perspective, the prior Friday’s losses, marked the greatest single-day loss since June of 2020. Wednesday’s post meeting rally marked the largest daily gain since May of 2020. This was followed by a fresh decline that once again marked the largest daily loss since June of 2020. In the end, the roughly quarter percent decline in the S&P 500 masked the intra-week activity as the market went nowhere fast. This closed out the first week of the month with a year-to-date loss of 13.5%. At Leap Wealth, we believe in “process over opinion.” Contact us today to learn more.

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Breaking The Market Across Capitalizations and Style

It was another rough week for the Major Markets as four out of five markets suffered with Emerging Markets seeing only a hint of gains for the week. The week was filled with volatility as the markets traded back and forth. The S&P 500 opened initially lower but managed to close slightly higher in the first session. On Tuesday, the market returned to Monday’s low before trading beneath that level to close near the lows of the day. Wednesday was unable to hold onto the daily gains as it effectively closed flat. Thursday was the sole significantly positive day for the week as the market effectively returned to the highs of Monday. However, these slight weekly gains were short-lived as the market fell substantially lower, closing just off the year-to-date lows. At the sector level, every element saw losses. The greatest being Consumer Discretionary as it fell nearly eight percentage points. The best of the worst was Materials which fell just under a percentage point for the week. Breaking the market across capitalizations and style, the losses were fairly consistent across segments as the best performer was down 3.1% while the worst was only down an additional 55 basis points. Reach out to us if you have any questions. Have a great week!

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The losses mounted last week as all five indices dropped

The losses mounted last week as all five indices dropped. The NASDAQ and the Emerging Markets index were neck in neck leading the way down. The Dow Jones was the best of the worst, but even that was down almost two percentage points. For the S&P 500, the week began in a topsy-turvy manner with some early losses which managed to close unchanged for the first session of the week. Tuesday saw the only day of sustained gains as the market added 1.6%. Wednesday and Thursday both opened higher than Tuesday’s close, but Wednesday saw another lackluster trading session. Yet, Thursday’s initial optimism gave way to significant losses which took the market back to unchanged on the week. Friday’s selling effectively represented the total losses for the week as the market sold off into the close. The losses came as a result of a number of influences. Earnings reports began in earnest last week and continue to ramp up this week, with the peak occurring next week. Headlines about companies like Netflix weighed heavily on the market as forward-looking guidance appears to be carrying more weight than simply reporting first quarter successes. Interest Rates rose higher on the news. Shorter to intermediate-term rates approached a 3% yield as the overall curve simultaneously rose and flattened. Bonds took a beating in turn as the Barclays US Aggregate Bond Index lost another percentage point, taking the year-to-date losses to 9.5%. At Leap Wealth, we are here to guide our clients through all the markets' turmoil, both short and long term. Contact us today to learn more about how we can help you. www.leapwealth.com

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The Major Markets resumed their declines last week as there were losses across all five indices.

The Major Markets resumed their declines last week as there were losses across all five indices. This has been the case for much of the year, whether positive or negative, the Nasdaq Composite held the top spot as it logged the greatest losses. However, the S&P 500 was not too far behind. The losses also seemed to be fairly widespread across the underlying sectors. While four segments did manage to end the week higher, not one managed to exceed a percentage point gain. As a result, the losses in the remaining seven sectors pulled the greater composite that much further down. Despite being a shortened trading week, the market held several significant economic reports. The most important economic report was Tuesday’s Consumer Price Index which garnered some of the greatest attention as the year-over-year reading reflected an 8.5% increase, exceeding estimates of 8.4% and significantly surpassing last month’s 40-year high at 7.9%. The inflation headlines and comments from various regional Federal Reserve Members have led to expectations of further significant movement in the Fed Funds Rate. According to the CME Group’s Fed Watch Tool, May’s meeting has a 90% probability of a 25-basis point increase followed by a 65.2% possibility of an additional 50-basis point increase at the June Meeting. At Leap Wealth, we are here to help you manage through the economic and political noise in order to stay on track. Contact us today to learn more.

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Interest rates rose substantially higher last week

Interest rates rose substantially higher last week. The greatest week-over-week change in basis points was in the 10-year and 20-year durations as they closed 34 basis points higher. This movement in interest rates weighed heavily on both the bond and equity markets. This caused the 20-year duration to flirt with the 3-percentage point level as inflation concerns continue to weigh on the markets. Delving deeper into the bond market, while the losses were widespread and fairly consistent, U.S. Corporates saw some of the greatest weekly losses. The year-to-date losses on many of these bonds, even the triple A-rated ones, have now exceeded double-digit losses for the year. The Bloomberg Barclays us aggregate bond index fell 1.82% last week, pulling the year-to-date losses down to 7.89%. The performance was not much better in the equity market. The major markets fell with the Nasdaq resuming the top position downward. But there were a few glimmers of gains in the broader equity market. At Leap Wealth, we believe in “process over opinion.” Contact us today to learn more.