Second Quarter (Q2) 2022 Summary
- Stocks slid into a bear market in Q2, pressured by inflation, Fed rate hikes, supply shortages, China Covid lockdowns, Russia’s invasion of Ukraine, and fears of global recession.
- Bond losses mounted as yields rose with tough inflation talk from the Fed even as global economic growth decelerates.
- GPM stock portfolios lost ground with the market in Q2. We continued adding to our longer held core positions and newer stocks.
- GPM balanced portfolios declined with stocks and bonds and hold substantial cash.
Brief Stock Market Recap
Stocks worldwide slid deeper into a bear market in Q2. Bearish sentiment is fueled by policy tightening by the U.S. Fed and other central banks to bring down elevated inflation, substantially due to government pandemic policy decisions to inject huge fiscal stimulus (’20 and ’21) that drove a surge in demand for goods, while simultaneously restricting travel and service spending and imposing supply chain restrictions – driving goods costs up. As the pandemic moderated early in ‘22, consumers began spending less on goods and more on services - travel, restaurants, concerts, etc. Russia invaded Ukraine and exposed poor U.S. energy policy as oil price inflation surged while supply chains in and out of China have been hampered by rolling, and now easing Covid lockdowns.