After being in Covid-19 lockdown and receiving three rounds of stimulus payments, U.S. households were able to stash away a substantial amount of extra cash. According to Moody’s Analytics, from the beginning of the pandemic through the end of 2021, U.S. households had built up an additional $2.7 trillion in savings. Moody’s estimates that households have tapped about $114 billion of these extra savings through the first five months of 2022.
After plummeting 8.4% in June, global stock markets are now down by over 20% in just the first six months of 2022. For U.S. stocks, this marks the worst six-month start in over 50 years. Bond investors also suffered through double-digit losses, with the broad U.S. index of fixed-income securities recording its worst first half on record.
Global equity markets were exceptionally volatile in May, as traders struggled to evaluate a complicated economic backdrop. Stocks ultimately ended the month roughly flat, but remain down by double-digits year-to-date.
World stock and bond investors had a rough April, as markets struggled against multiple headwinds, including high inflation, rising interest rates, Covid spikes, and the ongoing war in Ukraine. Global equities and bonds declined during the month by 8% and 5.5%, respectively.
In a survey of 1,736 HR executives world-wide by consultant Mercer LLC, about 38% say they offer a phased retirement, more than double the 17.2% that did so before the pandemic. According to the Society for Human Resources Management, 23% of U.S. employers had these arrangements in 2021, up from 16% just five years earlier.
U.S. stocks rebounded by just over 3% in March, but still recorded declines of more than 5% for the quarter. For domestic stocks, the quarterly decline was the worst in two years and snapped a seven-quarter winning streak. Foreign stocks were flat for the month, but also remained down by over 5% for the quarter.
Stock markets closed down for the second straight month, with global equities off by 2.5% in February and 7.4% year-to-date. Overall, foreign stocks have outperformed U.S. stocks, while value stocks held up better than their growth counterparts. Russia’s invasion of Ukraine added geopolitical uncertainties to a global economy already grappling with supply constraints, soaring inflation, and pandemic related obstacles.
U.S. stock values dropped nearly 6% to begin the new year, with large blue-chip stocks down around 5% and small companies off nearly 10% for the month of January. Technology stocks, as measured by the Nasdaq Composite, declined 9% for their worst January performance since 2008. Domestic value stocks, as well as foreign equities, saw more modest declines of just over 3% for the month.
Even after abolishing its one-child policy in 2016, the number of births in China continues to decline. China’s fertility rate, calculated as the number of children a woman has over her lifetime, now stands at 1.3 … well below the 2.1 rate considered to be the replacement level. In fact, China’s fertility rate is now below Japan’s rate of 1.34.
Equity markets ended 2021 on a high note, with global stocks advancing more than 4% in December alone. U.S. stocks delivered yet another blockbuster year of performance, while foreign stocks saw solid, if somewhat less impressive, returns. The year will be remembered for heavy speculation by investors in meme stocks, special-purpose acquisition companies (SPACs), and cryptocurrencies.