The first half of 2022 was a bumpy one for the U.S. stock market. It has been a busy newsstand the last six months to say the least.
The start of 2022 was headlined by the continued bottleneck and challenges in the supply chain which made it increasingly difficult to deliver goods on time. A commodity that was affected by the supply chain issues was lumber, a national shortage drove lumber prices up contributing to the increase in new home prices. The housing market in general experienced upward action as many U.S. cities saw record growth and record prices. January also marks the most recent high for the S&P 500 set early in the month.
The global commodity market was affected early in the year when Russia began military operations against Ukraine, European and western countries implemented sanctions against Russia. As a result of the war on Ukraine, the commodity market surged as the impact began to radiate to global nations. The physical impact of blockades and the destruction of productive crops fueled the surge along with the impact on trade and production following the sanctions. Russia is a world leader in many key exports and accounts for a significant share of coal, crude oil, and refined aluminum exports. Ukraine is also a key contributor for food commodities globally. The global impact was starting to be felt by the consumer, prices on food and gasoline started to increase.
Inflation worries were being discussed early in the year and rate hikes were becoming more of a reality. The Feds first of three rate hikes on the year started in March. Increasing 25 basis-points each meeting, with the last one occurring back in the middle of June at a tune of 75 basis points. This trend is anticipated to continue throughout the remainder of the year, as inflation numbers are the main focal point in terms of the amount of increase.
With all of this the current U.S. stock market finds itself in a Bear Market. The economy has shown considerable resiliency as consumers are still managing life post pandemic. As we reflect on the year thus far, there are some signs pointing towards inflation starting to cool. More numbers need to come out before making any conclusions but that is an indicator that will continue to be in the limelight. Along with the price of Crude Oil and the fluctuations in price the remainder of the year. Parts of the economy are starting to show signs of slowing but supply chain efficiency is improving, and consumers are still spending.