The Week Ahead – May 16, 2022

The S&P 500 teased investors with late day gains, but took a slide at close. Right now it appears that investors can expect any big rally to fizzle pretty fast. The S&P 500 came within a fraction of falling 20% from its November peak. The Nasdaq is still about 28% below its peak, which is well into bear market territory.

What is Stagflation?

I said it before, and I will say it again – we are going to enter a period of stagflation. Russia invading Ukraine only accelerated the return of the stag. Inflation is hitting some of its highest reported numbers in 4 decades and economic growth is expected to moderate this year, compared to 2021. GDP was 5.7% in 2021 and we are looking at half that this year. BOFA is predicting around 3.6% and Goldman is predicting around 3.2%.

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