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SFI Advisors
SFI Advisors
http://www.sfiadvisors.com 973.744.1014 plan@sfiadvisors.com
Schedule a Meeting


MONTHLY MARKET INSIGHTS | JULY 2022


U.S. MARKETS

Stock prices were lower in June as recession talk prompted investors to manage
risk in their portfolios.

The Dow Jones Industrial Average lost 6.71 percent, while the Standard & Poor’s
500 Index fell 8.39 percent. The tech-heavy Nasdaq Composite dropped 8.71
percent.1

Golf is deceptively simple and endlessly complicated; it satisfies the soul and
frustrates the intellect. It is at the same time rewarding and maddening—and it
is without a doubt the greatest game mankind has ever invented.

Arnold Palmer, winner of sixty-two PGA Tour events, including seven Majors


FOCUS ON INFLATION

Markets grappled this month with an uncertain economic outlook. After a descent
in the first half of June, markets were further rattled by the May inflation
report which showed an 8.6 percent increase, year-over-year, in the Consumer
Price Index (CPI). Led by a 34.6 percent increase in energy prices and a 10.1
percent rise in food prices, making this the highest rate of increase since
December 1981.2

The unwelcome CPI number raised concerns that the Fed would need to become more
aggressive with its rate hikes, making the prospect of a recession more likely.


FED RAISES RATES

Stocks briefly rallied after the Fed announced a hike in short-term interest
rates of 75 basis points. All Fed members said they expected rates to rise to at
least 3 percent by year-end, with half anticipating that rates may rise to 3.375
percent.3


POWELL’S COMMITMENT

On June 22, Fed Chair Powell told Congress that the Fed was committed to
combating inflation. Stocks surged in the third week of the month on the premise
that an economic slowdown may allow the Fed to be less aggressive with future
rate hikes. But the enthusiasm faded in the final days of trading as choppy
price action led to declines to close out the month.


SECTOR SCORECARD

All industry sectors were lower in June, with declines in Communications
Services (-9.82 percent), Consumer Discretionary (-11.04 percent), Consumer
Staples (-3.08 percent), Energy (-17.91 percent), Financials (-11.14 percent),
Health Care (-3.02 percent), Industrials (-7.77 percent), Materials (-14.41
percent), Real Estate (-7.64 percent), Technology (-9.48 percent) and Utilities
(-5.65 percent).4

U.S. Market Recap for June 2022

S&P 500 -8.39 Month (%) ‌ -20.58 Year-to-Date (%)

Nasdaq -8.71 Month (%) ‌ -29.51 Year-to-Date (%)

Russell 1000 -8.51 Month (%) ‌ -21.54 Year-to-Date (%)

10-Year Treasury 2.97 Month (%) ‌ 1.46 Year-to-Date (%)

Yahoo Finance, June 30, 2022. The market indexes discussed are unmanaged and
generally considered representative of their respective markets. Individuals
cannot directly invest in unmanaged indexes. Past performance does not guarantee
future results. U.S. Treasury Notes are guaranteed by the federal government as
to the timely payment of principal and interest. However, if you sell a Treasury
Note prior to maturity, it may be worth more or less than the original price
paid.


WHAT INVESTORS MAY BE TALKING ABOUT IN JULY

Earnings season begins in early July, providing investors with key insights into
the health of American consumers. Companies will also communicate how they are
navigating an increasingly challenging economic landscape.

Since the start of 2022, stocks have become less expensive on the basis of their
price/earnings (P/E) ratios. When the stock market hit an all-time high on
January 3, 2022, the forward P/E ratio for the S&P 500 index was 21.4. The
25-year average P/E sits at 16.5, for the period ended May 12, 2022. At the end
of June 2022, the average forward P/E was 15.9.5,6

Each quarter, the degree to which the stock market responds to corporate
earnings varies. But as investors grapple with a cloudy outlook, company reports
over the next four to six weeks may serve as an important barometer for
measuring the nation’s economic health and evaluating stock prices.


WORLD MARKETS

Slowing economic activity and rising inflation dragged overseas markets lower,
with the MSCI-EAFE Index sliding 8.07 percent last month.7

Major European markets were under pressure this month, as they faced increasing
economic and geopolitical headwinds. Italy fell to -12.86 percent, while Germany
dropped to -10.95 percent. Meanwhile, France dipped to -8.31 percent, as Spain
decreased to -7.63 percent and the U.K. to -5.77 percent.8

Pacific Rim markets were lower with the exception of Hong Kong, which rose 2.08
percent as China emerged from its COVID lockdown. Korea fell -14.17 percent,
Australia -9.31 percent and Japan -4.93 percent.9

World Market Recap for June 2022 Emerging Markets June (%) Year-to-Date (%) Hang
Seng (China) 2.08 -6.57 KOSPI (Korea) -14.17 -22.58 Nikkei (Japan) -4.93 -9.92
Sensex (India) -4.78 -9.18 EGX 30 (Egypt) -9.11 -22.79 Bovespa (Brazil) -9.18
-6.53 IPC All-Share (Mexico) -8.42 -11.03 ASX 200 (Australia) -9.31 -12.15
Europe     DAX (Germany) -10.95 -19.34 CAC 40 (France) -8.31 -17.08 IBEX 35
(Spain) -7.63 -6.17 FTSE 100 (United Kingdom) -5.77 -2.92 IT40 (Italy) -12.86
-21.91 Yahoo Finance, June 30, 2022. The market indexes discussed are unmanaged
and generally considered representative of their respective markets. Individuals
cannot directly invest in unmanaged indexes. Past performance does not guarantee
future results. International investments carry additional risks, which include
differences in financial reporting standards, currency exchange rates, political
risks unique to a specific country, foreign taxes and regulations, and the
potential for illiquid markets. These factors may result in greater share price
volatility.


INDICATORS


GROSS DOMESTIC PRODUCT (GDP)

The final estimate of first quarter GDP growth was revised lower to -1.6
percent.10


EMPLOYMENT

Employers added 390,000 new jobs in May, which represented a slower pace than
previous months despite a healthier number than expected. The unemployment rate
remained unchanged at 3.6 percent, while wage growth moderated from 5.5 percent
in April to 5.2 percent in May.11


RETAIL SALES

Retail sales fell 0.3 percent in May, perhaps reflecting the squeeze from higher
costs and interest rates. Excluding gasoline sales, retail sales fell 0.7
percent.12


INDUSTRIAL PRODUCTION

Output at the nation’s factories, mines, and utilities rose 0.2 percent, the
fifth consecutive monthly increase.13


HOUSING

Housing starts fell to their lowest level in over a year, declining 14.4 percent
in May. Single-family homes dropped 9.2 percent, while multiple family housing
sagged 26.8 percent.14

Sales of existing homes fell 3.4 percent in comparison to April and were 8.6
percent lower than a year ago. It was the weakest reading since June 2020.15

New home sales posted their first gain this year, rising 10.7 percent in May.16


CONSUMER PRICE INDEX (CPI)

Consumer prices rose 8.6 percent from May 2021 levels, the highest rate since
December 1981. Energy (+34.6 percent) and food (+10.1 percent) prices led the
year-over-year increase in the Consumer Price Index (CPI). On a month-to-month
basis, the CPI rose well above the consensus estimate of 0.7 percent to a full 1
percent.17


DURABLE GOODS ORDERS

New orders for long lasting goods rose 0.7 percent in May, making it the seventh
out of the last eight months that orders have increased.18


THE FED

The Federal Reserve announced a 0.75 percent hike in the federal funds rate. It
was the biggest rate increase since 1994.19

The announcement was made following the June 14–15 meeting of the Federal Open
Market Committee (FOMC). The FOMC also indicated new rate projections, showing
that all members expect rates to rise to at least 3.0 percent by year-end and
half the members expecting rates to rise to 3.375 percent.

The 75-basis-point rate increase was higher than earlier Fed guidance of a
50-basis-point increase and a response to recent inflation data and rising
inflationary expectations.19


BY THE NUMBERS: CLEAN BEACHES WEEK


180 MILLION20

Number of Americans who visit the beach each year


2 BILLION20

Number of individual visits to the beaches each year by Americans


$225 BILLION20

Amount beaches help generate per year for the national economy


ROUGHLY $25 BILLION20

Amount beaches contribute to federal tax revenue


$45 BILLION20

Amount of revenue beach tourism generates annually


421

Number of Billboard Top 10 hit songs by the Beach Boys


29 (NOT INCLUDING SMILE, WHICH WAS EVENTUALLY RELEASED AS PART OF A BOX SET)22

Number of studio albums by the Beach Boys


1 (THE MONKEY’S UNCLE, IN WHICH THEY PERFORM THE TITLE SONG WITH ANNETTE
FUNICELLO)23

Number of Disney films featuring the Beach Boys

--------------------------------------------------------------------------------

 

The content is developed from sources believed to be providing accurate
information. The information in this material is not intended as tax or legal
advice. Please consult legal or tax professionals for specific information
regarding your individual situation. This material was developed and produced by
FMG Suite to provide information on a topic that may be of interest. FMG Suite,
LLC, is not affiliated with the named representative, broker-dealer, or state-
or SEC-registered investment advisory firm. The opinions expressed and material
provided are for general information and should not be considered a solicitation
for the purchase or sale of any security.

Investing involves risks, and investment decisions should be based on your own
goals, time horizon and tolerance for risk. The return and principal value of
investments will fluctuate as market conditions change. When sold, investments
may be worth more or less than their original cost.

Any companies mentioned are for illustrative purposes only. It should not be
considered a solicitation for the purchase or sale of the securities. Any
investment should be consistent with your objectives, timeframe, and risk
tolerance.

The forecasts or forward-looking statements are based on assumptions, subject to
revision without notice, and may not materialize.

The market indexes discussed are unmanaged and generally considered
representative of their respective markets. Individuals cannot directly invest
in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally
considered representative of large-capitalization companies on the U.S. stock
market. The S&P 500 Composite Index is an unmanaged group of securities
considered to be representative of the stock market in general. The Nasdaq
Composite is an index of the common stocks and similar securities listed on the
Nasdaq stock market and considered a broad indicator of the performance of
stocks of technology and growth companies. The Russell 1000 Index is an index
that measures the performance of the highest-ranking 1,000 stocks in the Russell
3000 Index, which is comprised of 3,000 of the largest U.S. stocks. The MSCI
EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves
as a benchmark for the performance in major international equity markets, as
represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia.
Index performance is not indicative of the past performance of a particular
investment. Past performance does not guarantee future results. Individuals
cannot invest directly in an index. The return and principal value of stock
prices will fluctuate as market conditions change. And shares, when sold, may be
worth more or less than their original cost.

International investments carry additional risks, which include differences in
financial reporting standards, currency exchange rates, political risks unique
to a specific country, foreign taxes and regulations, and the potential for
illiquid markets. These factors may result in greater share price volatility.

The Hang Seng Index is a benchmark index for the blue-chip stocks traded on the
Hong Kong Stock Exchange. The KOSPI is an index of all stocks traded on the
Korean Stock Exchange. The Nikkei 225 is a stock market index for the Tokyo
Stock Exchange. The SENSEX is a stock market index of 30 companies listed on the
Bombay Stock Exchange. The Jakarta Composite Index is an index of all stocks
that are traded on the Indonesia Stock Exchange. The Bovespa Index tracks 50
stocks traded on the Sao Paulo Stock, Mercantile, & Futures Exchange. The IPC
Index measures the companies listed on the Mexican Stock Exchange. The MERVAL
tracks the performance of large companies based in Argentina. The ASX 200 Index
is an index of stocks listed on the Australian Securities Exchange. The DAX is a
market index consisting of the 30 German companies trading on the Frankfurt
Stock Exchange. The CAC 40 is a benchmark for the 40 most significant companies
on the French Stock Market Exchange. The Dow Jones Russia Index measures the
performance of leading Russian Global Depositary Receipts (GDRs) that trade on
the London Stock Exchange. The FTSE 100 Index is an index of the 100 companies
with the highest market capitalization listed on the London Stock Exchange.

Please consult your financial professional for additional information.

Copyright 2022 FMG Suite.

1. WSJ.com, June 30, 2022

2. CNBC.com, June 10, 2022

3. WSJ.com, June 15, 2022

4. Sector.SPDR.com, June 2022

5. Insight.Factset.com, May 16, 2022

6. am.JPMorgan.com, June 30, 2022

7. MSCI.com, June 30, 2022

8. MSCI.com, June 30, 2022

9. MSCI.com, June 30, 2022

10. BEA.gov, June 29, 2022

11. WSJ.com, June 3, 2022

12. WSJ.com, June 15, 2022

13. MarketWatch.com, June 17, 2022

14. MarketWatch.com, June 16, 2022

15. CNBC.com, June 21, 2022

16. Bloomberg.com, June 24, 2022

17. CNBC.com, June 10, 2022

18. Census.gov, June 27, 2022

19. WSJ.com, June 15, 2022

20. Asbpa.org, 2022

21. Billboard.com, 2022

22. Beachboys.fandom.com, 2022

23. BMDB.com, 2022

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The content is developed from sources believed to be providing accurate
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regarding your individual situation. Some of this material was developed and
produced by FMG Suite to provide information on a topic that may be of interest.
FMG Suite is not affiliated with the named representative, broker - dealer,
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material provided are for general information, and should not be considered a
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