Your Evening Briefing: The Stock Market Doomsayers Were Right

With June now over, we can say that the S&P 500 has suffered its toughest first half since Richard Nixon was in the White House. It was a rout for the history books, with the equity gauge down about 21%. Investors in consumer stocks witnessed a wipeout of $1.8 trillion in market value. That said, the S&P is now simply back where it was in March of last year. On Thursday, we discovered consumer spending fell for the first time in 2022. It’s both an indicator of the pernicious effect of high inflation and perhaps on plan for the Fed as it tries to arrest rising prices amid frenzied talk of recession, hoping to engineer a touchdown that doesn’t smash the landing gear. But some, like Matt Maley, chief market strategist at Miller Tabak, aren’t so sure the central bank’s strategy will work: “When demand is not the key reason why inflation is a problem, a slower economy is not going to help bring inflation down as much as some experts seem to think.” So what does this mean for the second half? Unclear.

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