From the desk of…
Remember when Fed Chairman Powell promised to kill inflation a month ago? Inflation is as prominent as ever.
The stock market “officially” became a bear market this week, defined as a 20% decline in the S&P 500 Index.
As the old adage says, a picture is worth a thousand words. The chart below shows how strong microcap performance can be in times following extremes in consumer sentiment.
Over the past 12 to 18 months, the Fed has explained that the inflation we have been experiencing is short-term and transitory.
The Russell 2000 Index consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000 Index, as ranked by market capitalization. The S&P 500 Index is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe. It is not possible to invest directly in an index. R-Squared is a statistical measure that represents the percentage of a fund’s or security’s movements that are explained by movements in a benchmark index.
Earnings growth is not representative of the fund’s future performance.
While each of the domestic indexes have clearly entered bear market territory, the average stock has experienced a far greater decline.