Stock futures slide after S&P 500 notches worst first half since 1970
Investors are proceeding into the second half of 2022 with caution after the worst first six months to a year in decades. Risk-off sentiment was seen in most areas of the market, fueled by soaring inflation and the Fed's aggressive monetary policy to fears of slowing growth and increased borrowing costs. A much hoped for "soft landing" also hit some turbulence, with Fed Chair Jay Powell remarking this week "there is no guarantee that we can do that and it's obviously something that's going to be quite challenging."
Snapshot: The S&P 500 (SP500) has plunged 21% since January, losing more than $9T in market capitalization and suffering its worst first half of a year since 1970, while the Nasdaq Composite (COMP.IND) and Dow Jones (DJI) fell 16% and 30%, respectively. The 10-year Treasury yield climbed from 1.5% to around 3.00%, and Bitcoin has tumbled nearly 56% YTD to under $20,000. One of the only pockets of the market that rose in the first-half was commodities, with crude oil going from $75 to well over $100 a barrel and U.S. gas prices nearly tripling before falling back in recent weeks. Stock futures at 4:15 a.m. ET: Dow -0.9%; S&P 500 -0.9%; Nasdaq -1%.
Heading into H2, many are worried that central bank actions could push the global economy into a downward spiral. The latest reading from the Atlanta Fed's GDPNow tracker is now in negative territory, predicting Q2 real GDP growth of -1.0% as of June 30, down from +0.3% on June 27. If that print comes to fruition, it would mark two straight quarters of negative real GDP growth (-1.6% in Q1) making it a technical recession.
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