Page 34 - Additional Fund News Today

Small caps have taken an outsized hit this year as recession risk rises under the regime of an aggressively tightening Federal Reserve monetary policy.

A stronger than expected jobs report and ISM report for August have markets now positioning for the likelihood of another 0.75% interest rate increase at the central bank's next meeting at the end of September.

Inflation appears to be more broadly entrenched than previously thought and rising interest rates, domestic inflation fears, an aggressively tightening Fed.

Market volatility continues as summer officially comes to a close in the U.S. and the August Institute for Supply Management (ISM) report came in higher than expected, reflecting a more robust economy, particularly in light of August’s surprisingly strong jobs report.

The most recent attempt at a bear market rally of major indexes leading up to the release of the August CPI resulted in the S&P 500 clawing back almost 4% of losses over the course of four days before crashing on September 13.

A better-than-expected earnings season alongside lighter inflation reports from July drove stocks to rally in mid-August, and analysts anticipate that the S&P 500 will end 2022 at levels slightly above its rally from bear-market lows in June.

In a year of volatility and market uncertainty that has seen both equities and bonds struggle, blue-chip companies have proven their value once again.

Volatility persists in the second half of the year as advisors and investors digest the news of the second consecutive quarter of economic retraction.

Looking back over the second quarter and first half of the year, small-cap value active managers have outperformed their benchmarks.

It’s been a difficult year for markets, investors, and their portfolios, where equities and bonds have been challenged by soaring, persistent inflation alongside a rising rate environment.