2ND QUARTER EQUITIES
Equity Market: A bear market that began on the first trading day of 2022 drove down the S&P 500 for its worst first six months in a calendar year in 52 years. Investors now head into the second half fearing aggressive monetary tightening by the Federal Reserve and other major central banks could tip the economy into recession. The other major indexes all saw steep declines.
The S&P 500 ended the second quarter with a decline of 16.1%. and was down 19.96% for the half. The Dow Jones Composite Average was off 12.49% for the quarter and 13.97% for the year-to-date. The Russell 2000 was down 17.2 % for the quarter and 23.43% for the year. The worst performer was the Nasdaq Composite which was down 22.28% for the quarter and 29.23% for the year. In the first days of July the indexes have fluctuated but declined overall.
Preferred Equities: As always, despite market conditions, we look for long-term equity opportunities. Our focus is on companies that can weather both the short-term period and flourish in a longer time frame. We want fundamentally sound companies with reasonable valuations and that pay dividends. In that context, similar to last quarter, we are looking at these sectors:
HEALTH CARE: This sector has interesting opportunities in biotechnology and in the variety of new treatments and devices being developed for the aging population.
INDUSTRIALS/MATERIALS: The legislation to promote infrastructure investments, as it rolls out, should create opportunity for many companies in this sector.
TECHNOLOGY: We are interested in selective technology companies with emphasis on innovation. These companies can provide opportunities for a portion of client portfolios.
ENERGY: This sector has opportunities worth exploring in the electric companies that will be modernizing their power grids, and in some of the new alternative energies.
CONSUMER STAPLES: These companies can actually do well in an inflationary environment where consumers watch their spending and stick to basics.