August Market Insight
Though uncertainty and conflict reigned during the first half of 2022, the second half (while clearly just at its onset) has been much more stable and financially rewarding. Solid second quarter corporate earnings have been paired with better than anticipated forward earnings guidance for the remainder of 2022. As expected, the late July interest rate increase from the Federal Reserve was exactly in-line with projections leading to a reduction in macro-level uncertainty. Commodity prices and notably energy prices seem to have peaked. These combined variables provided the impetus for a significant positive move for U.S. based equities in July and midway through August. The S&P 500 was up over 17% from the mid-June lows and down only single digits for the year. Intermediate and longer-term interest rates have stabilized and are somewhat range bound. Since the Fed meeting in June, the aggregate bond benchmarks have shown positive returns increasing by approximately 3%. The process of investment decision making may take many different forms. But at United, our disciplined process and philosophy depends on sound economic and fundamental analysis which typically removes much of the short-term noise. While volatility arises from time to time, we believe fiduciary asset management requires that United’s market opinion have a foundation in fact. True wealth and asset growth eventually follows fact, not speculation. Though mindful of market obstacles, we remain positive for the remainder of the year and into 2023.