The S&P 500 Index is a broad-based, weighted index that measures the performance of the 500 largest publicly traded companies on the U.S. stock market. Even with continued market fluctuations, it has been incredibly robust. Standard & Poor’s has decided the makeup of this index. On the list are heavyweight corporations such as Procter & Gamble (PG), Johnson & Johnson (JNJ), Microsoft (MSFT), and ExxonMobil (XOM). In the first three months of the year, most sectors recorded gains. This watershed moment is the symptom of a complicated economic climate.
Unlike at the start of the year, this previous quarter, the S&P 500 Index showed a better valuation. Here’s what has changed Investors had a reason to be cheerful at the start of 2022. This shift in perspective will do little to head off a possible rebound. In the past, these bearish phases have been followed by restarts in positive market performance. Many of the country’s leading analysts expect a high, unprecedented market rebound to occur within the next few weeks and months. Only true if the worst policy decisions and economic slowdown don’t materialize.
In the first quarter, more than half of the sectors within the S&P 500 Index logged positive returns, indicating a degree of stability amid uncertainty. Two notable sectors saw minimal drops over this timeframe. Claims for unemployment compensation have continued to be quite low, and the unemployment rate has been stable near its 4.1% historic low level. Measures of both manufacturing and service activity continue to point to expansion, giving us more reason to believe in the economy’s resilience.
Indeed, despite these optimistic signs for the economy, the U.S. Dollar (USD) has had a difficult time attracting bids. Despite more-positive-than-expected initial jobless claims data, the currency has continued to feel long-standing selling pressure. The recent tariff announcements from the Trump administration, especially on steel and aluminum, should alarm everyone about the specter of stagflation. This latest development makes the economic picture even murkier.
Gold had its own shocks in this period, correcting from its all-time high of $3,167. The precious metal’s value fell under the $3,100 threshold, adding to anxiety among the global investment community about inflation and economic collapse.