100 Days to Forget

By Alex Eule |  Wednesday, May 25 A Tough 100 Days. Today was the hundredth day of 2022 trading -- there's not much to celebrate. The Nasdaq Composite is down 26.9% on the year. It's the worst ever 100-day start to the year for the tech-heavy index. For the large-cap S&P 500, down 16.5%, it's the worst start since 1970. The news is slightly better for the more value-focused Dow Jones Industrial Average, which is down only 11.6%. Today, though, the major indexes all finished higher, with the Nasdaq rising 1.5% and the S&P 500 up nearly 1%.   The latest batch of earnings offered some relief from the constant drum of recession talk. Nordstrom, the luxury department store retailer, actually  raised its outlook for 2022 -- a contrast to last week's disappointments from  Target and Walmart. CEO Erik Nordstrom told investors that "we saw customers shopping for long anticipated in-person occasions such as social events, travel and return to office."  On the key issue of inflation, the company said it's been relatively unaffected: "At this point, we have not seen inflationary cost pressures adversely impact customer spending, which we believe is due to the higher income profile and resiliency of our customer base." Shares of Nordstrom ended the day up 14%. The stock is up 4% on the year. After last week's retail bloodbath, investors saw the news as positive enough to jump back into other consumer stocks too. The consumer discretionary sector was the day's best performing group, up 2.8%, led by gains from Best Buy and Bed Bath & Body Works. Stocks were also helped by this afternoon's release of minutes from the Federal Reserve's last policy meeting on May 3 and 4. The notes indicated that the Fed was still committed to a series of half-percentage-point interest rate increases, easing fears that a wave of larger hikes was still to come. My colleague Brian Hershberg covered the minutes and the market's reaction:  Investors cheered that the minutes didn’t take a more hawkish tone than has been articulated publicly. In 3 p.m. trading in New York, the Dow Jones Industrial Average was up 0.9% after trading flat before the minutes were released. The S&P 500 was up 1.4% and the tech-heavy, and more rate-sensitive, Nasdaq Composite was up 2.1%. The benchmark 10-year Treasury yield was recently at 2.75%, about flat with the level before the minutes were released.  Despite the day's relative optimism, recession worries couldn't be entirely avoided. Ed Yardeni, a closely followed economist and market strategist, said the possibility of a recession was growing: "It’s possible that we could talk ourselves into one," he wrote this morning. He's still predicting growth through the end of next year, but he said that "we are raising the odds we assign to a recession scenario from 30% to 40%." The good news? "We still expect to see a new record high in the S&P 500, but not until late next year."

 

DJIA: +0.60% to 32,120.28 S&P 500: +0.95% to 3,978.73 Nasdaq: +1.51% to 11,434.74 The Hot Stock: Best Buy +9.0% The Biggest Loser: Agilent Technologies -3.2% Best Sector: Consumer Discretionary +2.8% Worst Sector: Utilities -0.1%