The poor start to 2022 continued last week, with both equities and bonds in negative territory for the year so far. Bank earnings on Friday failed to capture the imagination of equity investors with JP Morgan taking a large hit following their releases. However, for the week ahead there are 38 S&P 500 companies, along with 4 Dow constituents reporting, including the likes of Goldman Sachs and Netflix. Just to note US markets are closed today in observance of the Martin Luther King holiday.
Bonds were also affected by the now familiar inflation/interest rate narrative. US inflation (more below) did indeed spike to a 40 year high, but markets barely moved as the figure was as expected and broadly priced in. A useful reminder of the forward looking nature of equity markets. Currency movements are also not helping Irish investors so far this year, with the euro strengthening against the US dollar, despite the more hawkish tone from the Federal Reserve. Earnings look set to be the main focus for this week, but so far in 2022 the road has been a little bumpy.