Tyler and Jordan sit down to recap the first quarter 2022 capital market returns. The S&P 500 fell nearly 5% in the quarter with weaker returns in small cap stocks (-7.8%), small cap growth stocks (-12.7%), and large cap growth (-9.2%). The S&P 500 at its low was down 12.4% before staging a rebound in the last few weeks of the quarter. Commodity returns were led by energy which recorded a 46.1% return for the quarter. Strong returns in agricultural products like wheat (+29%) and corn (+26%) were boosted by ongoing geopolitical events. The bond market had its worst quarter in 40 years as the 10-year treasury rose from 1.63% to 2.32% and briefly touched 2.48% before settling lower. As foreshadowed in our last podcast, the 10-year and 2-year treasury curve has now inverted with the 2-year treasury (2.42%) yielding higher than the 10-year treasury (2.35%) as of the time of this taping. The Bloomberg Aggregate Bond Index fell 6% as rates increased due to the Federal Reserve rate hikes and persistent inflation. The labor market remains strong with 1.7 million jobs added in the first three months of the year. The unemployment rate is nearing the pre-pandemic low and now stands at 3.6%. Looking forward to first quarter earnings, current expectations are for revenues in increased 10.7% and earnings to increase 4.8%.
S&P 500 Return:
Fixed Income Rates and Returns:
Labor Market Details: