Monthly Outlook - August 2022

July turned out to be one of the best months for equity markets since 2020, with the S&P 500 rising more than 9% as nearly all major subsectors rose sharply during the month.

Despite the clear rise in equity markets, we have seen a second consecutive quarter of negative GDP, which historically has meant a recession, despite what the White House has stated. This fact shows the negative fundamentals we have seen in recent months.

Again, bear market rallies are difficult to rely on and should be taken as opportunities to rebalance portfolios, rather than signs that the bull market is back in place.

Macro Corner

Markets have reacted strongly to the current environment, rising sharply throughout July and recouping some of the losses suffered by year-to-date performance. This has taken place despite the continued erosion of economic fundamentals, inflation at 40-year highs and a host of havoc taking place in Europe due to Russia's control of gas supplies.

We have had the second consecutive quarter of negative GDP growth. U.S. GDP fell 0.9% in 2Q, following -1.6% in 1Q and not surprisingly, the "r" word has become politically charged as the November midterm elections loom.