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Market Update: 06-27-22

RELIEF AT THE PUMP AND FOR PORTFOLIOS?

 2022 has been rough all-around for the American consumer. Not only are we battling decades-high inflation, but investors’ portfolios are off to one of the worst starts to a year in history as we near the halfway point. Our technical work is first and foremost rooted in trend following, and the trend in both stock and bond prices so far this year have of course been down. However, one trend that has been strongly higher is energy prices. It may be early, but we see some potential signs that energy trends could be changing, which would not only have positive implications for consumers’ wallets, but also potentially investors’ investment portfolios.

GAS PRICES HIT RECORD HIGHS

Let’s start with the single price that matters to consumers most: gas prices. Even if you drive an electric car, it would be hard not to notice the huge increase in gas prices over the past year. As shown in Figure 1, the AAA national average price for a gallon of gasoline just hit $5 for the first time ever. For many Americans, the amount of gasoline they need is simply fixed, as they must drive to work, school, etc. So when prices rise, the money has to come from somewhere else, and it should therefore come as no surprise that the consumer discretionary sector is the worst performing S&P 500 Index sector year-to-date with a more than 30% loss.

Our Team

Susan Jerris

Susan
Jerris

LPL Registered Principal 
Email Susan
CA Insurance License #0662706
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Anthony Roble

Anthony
Roble

LPL Registered Administrative Assistant
Email Tony
CA Insurance License #0K61923
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Diana
Esperon

Administrative Assistant
Email Diana