The S&P 500 closes the quarter lower, although it gained 14% in its first half, from early July to mid-August. Never before in the history of record keeping has the S&P 500 closed a quarter down if it had risen at least 10% before. In addition, the index shows a record quarterly decline from the same quarterly high.
Historical performance of the S&P 500 (bars from left to right): period, quarterly result in %, intra-quarter high in %, and decline from quarterly high in %. Source: Bloomberg
The third quarter of 2022 will go down in history as a period during which something happened that had never happened before.
The S&P 500 closes the quarter lower, although it gained 14% in its first half, from early July to mid-August. Never before in the history of statistics, since 1927, has the S&P 500 closed a quarter lower if it had grown at least 10% before. In addition, the index shows a record quarterly decline from the same quarterly high.
S&P 500 index chart in 1 day intervals
The sharp reversal of the US stock market in mid-August and its subsequent rapid decline reflects the magnitude of the pressure that risky assets are experiencing due to the increase in interest rates by the world’s leading central banks.
“The US stock market may remain under pressure until about mid-October, when the season for corporate reporting for the third quarter begins,” said Oleg Syrovatkin, lead analyst at Otkrytie Investments Global Research. “The results of US companies will allow investors to better understand the current state of their businesses and future prospects.
In the meantime, the problem is that investors are very disoriented due to the constant change in expectations for rates in the direction of their larger growth. No one can guarantee that the latest FOMC forecasts that the federal funds rate will be 4.6% at the end of 2023 will not be raised again.”