Weekly Market Update: May 23, 2022

Market Data as of Week Ending: 5/20/2022 unless noted otherwise.
U.S. stock prices declined for the seventh consecutive week as the S&P 500 reached bear market territory, declining more than 20% from its peak in January, using
intraday prices. The risk-off sentiment has intensified as several large retailers reported results below expectations and continue to cite supply issues along with cost
and wage inflation, despite healthy demand. Value oriented stocks largely outperformed their growth counterparts and smaller companies outperformed large
company peers. Eight of the eleven major economic sectors declined led by significant losses in the consumer staples and consumer discretionary sectors. The three
exceptions with gains for the week were in the energy, health care, and utilities sectors. Developed foreign markets posted a gain for the week and emerging market
stocks outperformed both developed markets and the U.S.

U.S. Treasury yields dropped again as the 10-year treasury fell 0.15%, ending the week at 2.78%. Bond investors continue to face a challenging environment with
higher rates on new issuance despite strong demand for high quality securities. Higher quality government bonds outperformed for the week while credit sensitive
bonds lagged. Credit spreads continued to widen, especially for lower quality bonds, as yields for investment grade corporate bonds were relatively unchanged at
4.4%, while high yield corporate bonds increased, finishing the week at more than 7.8%.

Economic data releases were generally better than expected, but were largely overshadowed by comments from Fed policy makers that indicated tighter financial
conditions were needed to tame inflation. Retail sales were better than expected in April and increased 0.9%, which was 8.2% higher compared to the same period
last year. Despite the solid report, these readings are not adjusted for inflation and growth has been anemic after backing out higher prices. The housing market is
facing significant headwinds of higher prices, higher mortgage rates and supply that remains tight. The National Association of Realtors reported that existing-home
sales declined more than 2% in April, which was down nearly 6% from a year earlier. In Europe, the U.K. is also dealing with persistently high inflation as the country
announced that consumer prices in April were 9% higher than a year earlier, a forty-year high.

See it by the numbers.

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