The markets rocketed last week with the Dow (+6.3%), NASDAQ (+6.9%), and S&P 500 (+6.6%) having their best week since November 2020. In doing so, that brought the markets back into positive territory so far in May. Taxable bonds were up almost 1%, and I am pleased to announce that tax-free municipal bonds were up about 3% for the week. That was a pleasant recovery, as we have watched the tax-free bonds exhibit gains for six straight days, following 5 months of continuous losses.
The theme of the markets continues to revolve around inflation, but more so what the Fed will do to respond to it. Inflation values seem to have peaked in February, and are showing signs of easing. Further, the Fed released its comments from their prior meeting, and they felt that a recession can be avoided, which came as good news to the markets. We also concluded the first quarter of earnings season with a respectable gain of 9%. While relatively low compared to previous quarters since the pandemic, that growth number is still very respectable. If we can continue economic growth with inflation coming down, that could be the recipe of the markets making up for some of their YTD losses. Fingers crossed.
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.