Weekly Economic Update: May 24th, 2022

Presented by Nicholas Wealth Management

May 24th, 2022

 

Weekly Market Update

In this week’s recap: Recession concerns rising.

 

The Week on Wall Street

Recession fears grew last week following weak earnings reports from major retailers, sending stocks lower.

The Dow Jones Industrial Average fell 2.90%, while the Standard & Poor’s 500 lost 3.05%. The Nasdaq Composite index dropped 3.82% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.84%.1,2,3

 

Trending Lower

Stock prices remained in a downtrend, capped by a sell-off on Wednesday following a succession of disappointing earnings reports from several major retailers. Despite solid April retail sales and industrial production data, weak economic numbers from China and shrinking profit margins at U.S. retailers fanned recession fears throughout the week.

Rising yields, which have been an overhang to the markets in recent weeks, turned lower as investors appeared to move cash to bonds from stocks. But lower yields did not help stock prices, which closed out the week with a volatile trading session.

 

Cloudy Picture with Retailers

Investors received a mixed message from the retail sector. April’s retail sales increased 0.9% from March, signifying that consumer spending remained strong. But it was difficult to determine from the retail sales report whether the increase was a function of higher retail prices or a resilient consumer.4

It was also a big week for earnings reports from some of the nation’s largest retailers. Results were disappointing as retailers struggled with supply chain issues, higher costs, and misaligned product mix. Some retailers indicated a drop in the number of transactions, suggesting that shoppers reduce purchases due to higher prices on essential items.

 

Tip of the Week

Check your credit report annually for errors. (They are not uncommon.) Under federal law, you are entitled to a free annual credit report from the big 3 credit reporting agencies (Equifax, Experian, and TransUnion) each year.

 

Radio

Time Change! Retire Ready with David Nicholas will now be airing on Saturdays at 6:00 PM on 95.5 WSB. Be sure to tune in this weekend! If you missed this past weekend’s show, CLICK HERE to listen!

 

Media

Be sure to subscribe to our YouTube page for all of David’s media commentaries CLICK HERE!

A Navy SEAL Officer, a White House Fellow, husband and father. Latham Saddler is the leader Georgians need in Washington. David Nicholas joined Stuart Varney on Fox Business this morning, 5/24 to share why Saddler could pull off a Cinderella Story in tonight’s Georgia primary.

 

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CITATIONS:

  1. The Wall Street Journal, May 20, 2022
  2. The Wall Street Journal, May 20, 2022
  3. The Wall Street Journal, May 20, 2022
  4. The Wall Street Journal, May 17, 2022

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