Medicare Agent News: A Solid, if Curious, Second-Half Start

Tuesday, July 5, 2022

A Solid, if Curious, Second-Half Start

By Brian Hershberg | Friday, July 1

Solid Start. Stocks initially kicked off the second half of 2022 much as they ended the first, in retreat, before a midday rally amid fairly thin pre-holiday trading volume drove major U.S. indexes solidly into the green. It’s not clear what prompted the turnabout, given that the same concerns that drove the worst first half in decades—higher inflation, higher interest rates, and a higher risk of recession—remain firmly in place.

The Dow Jones Industrial Average closed up 1.1% today, after rallying from more than 200 points down early in the session—the blue-chip index still lost 1.3% on the week. The S&P 500 rose 1.1% and the Nasdaq Composite gained 0.9% Friday, but both indexes closed deeply in the red for the week.

Trading volume was among the slowest this year, with 4.058 billion shares changing hands on the New York Stock Exchange, according to the Dow Jones Market Data Group, versus the typical daily volume closer to 5 billion shares. Thin volume tends to magnify market moves.

Jim Reid, a strategist at Deutsche Bank, summed up the mood today:

If you want the good news this morning it’s that [the first half of the year] is now finally over. If you want the bad news it’s that there’s not much good news around as we start [the second half]...

Bad [first halves] for equities have tended to be followed by much better [second halves]. But with increasing warnings that a recession is round the corner, it isn’t so obvious where things are headed this time round.

Barron's reporters Jack Denton and Teresa Rivas captured more of today's curious rally in their daily market coverage.

Indeed, the first economic data release of the new month—the Institute for Supply Management's manufacturing index—only served to reinforce recession concerns. The headline index tumbled to 53.0 in June, below expectations, and logging the largest-one month drop since the pandemic hit. What's more, a number of sub-indexes in the report, including employment and new orders, contracted.

While manufacturing isn't as big a contributor to the economy as it once was, the index is something of a bellwhether for broader economic conditions, writes Barron's reporter Megan Cassella. And now it points to a slowdown later this year.

Here's Megan:

That is in part because while growth remains positive for now, the sharp slowdown in June [PMI] shows that "‘Demand Destruction’ may be taking shape,” as PNC Senior Economist Kurt Rankin wrote on Friday.

Whether or not inflation cools and a recession is declared in coming months, we'll take the optimism—founded or not—as we head into the long weekend. Happy Independence Day!

Watch our weekly TV show on Fox Business Saturday or Sunday at 10 a.m. or 11:30 a.m. ET. This week, an interview with analyst Dana Telsey on what's next for retailers, plus, more insights on income investing and a look at the disconnect between booming travel demand and low-flying airline stocks.