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Our 2022 Mid-Year Market Update

By Joe Arnold, AIF®

The volatility of the 2020s just won’t quit, and it seems as if it’s the new norm. From a global pandemic and historic inflation to an unparalleled housing market and a war in Ukraine, it’s hard to believe we’re only two years into this decade. The economic uncertainty of the last few months has many anxious to know where we’re headed.

While there are still many unknowns, we’d like to take the time to reflect and review what’s happened so far in 2022 and what you can expect going forward.

Stock Market Performance

It’s no secret that the stock market has seen increased volatility in the last couple of months—partly due to geopolitical events and partly due to the continued effects of historically high levels of inflation (8.6% for the 12 months ended May 2022). (1)

With the S&P 500 now officially in a bear market, defined as a 20% decline from a recent peak, (2) experts and some of the country’s top CEOs like Elon Musk and JPMorgan Chase CEO Jamie Dimon are warning that a recession is coming. (3)

This year has seen concerns regarding the global economy reach new highs as many countries struggle in different ways:

  • The ongoing COVID-19 surge in China has prompted fresh rounds of lockdowns and stifled economic growth. (4)
  • The possibility of nuclear war in the conflict between Russia and Ukraine has many worried. (5)
  • High inflation in the U.S. is reducing demand for everyday goods and could send the economy into a recession. (6)

There’s no way to know exactly how all these events will unfold, but our best advice is to keep calm throughout the storm. Stock market volatility, and even recessions, are normal parts of the economic cycle, and sticking with a tried-and-true investment strategy is the best way to navigate uncertain times.

Employment Levels

Employment levels have steadily been returning to pre-pandemic numbers, with the May 2022 unemployment rate remaining at 3.6%, unchanged from April. This number, about 6 million people, is similar to the February 2020 pre-pandemic rate of 3.5%, or 5.7 million people. (7)

The payroll employment sector also saw an increase of 390,000 jobs in May, adding gains to the leisure and hospitality, professional services, retail, and manufacturing industries. (8) With these revisions, employment in February and March combined is 39,000 lower than previously reported, suggesting to many experts that the economy as a whole will continue to grow despite high inflation.

Interest Rates and the Federal Reserve

In response to surging inflation, the Federal Reserve yet again raised interest rates on June 15th by 0.75%, the largest hike in a single meeting since 1994. (9) As alarming as this already is, further raises are expected, up to approximately 3.4% by year’s end. This suggests another 1.75% in total rate hikes, spread across the remaining four scheduled policy-setting meetings this year, a much steeper path of rate hikes than was predicted in March.

There is much debate over how much rates should rise in order to effectively combat inflation. Too much of a rise could halt economic recovery, whereas too little could keep inflation rampant and send the economy into a recession. However, a Fed statement reiterated its resolve to ongoing increases, stating, “Overall economic activity appears to have picked up after edging down in the first quarter.” (10)

What Does This Mean for You? 

Not knowing what lies ahead can be unsettling—or even downright scary. Rest assured, we are watching over your portfolios and making necessary adjustments if and when markets dictate.  If you don’t have a financial partner to help you weather these uncertain times (and whatever lies ahead), we at Foundation Wealth Advisors offer experienced and objective advice, while putting our clients’ best interests first at all times. We can come alongside you as we navigate your financial challenges and opportunities with confidence. To learn more about our 2022 outlook and how we can help you, schedule a complimentary appointment by calling (440) 899-7535 or emailing me at

About Joe

Joe Arnold is an independent financial advisor and the founder and president of Foundation Wealth Advisors, LLC, an independent firm whose advisors provide private investment management for individuals and families, as well as retirement plan consulting for small and mid-sized businesses. With over 20 years of experience in the financial industry, Joe specializes in providing objective advice to individuals, as well as transparency in building and managing company 401(k) retirement plans. He is committed to putting his clients’ best interests first in all decision-making and recommendations. Based in Westlake, Ohio, he serves clients in the Cleveland, Akron, and surrounding areas, as well as throughout the country. Joe received a bachelor’s degree in business administration from Cleveland State University and is an Accredited Investment Fiduciary® (AIF®) professional. He has been featured on national television, including CNBC and FOX Business, and quoted in various publications, including The Wall Street Journal, CNN Money, Forbes, and others. Joe lives in Rocky River, Ohio, with his wife, Allison, and their two grown children, Kevin and Keira. An avid golfer, he is a former Class A PGA of America teaching professional and NCAA Division 1 athlete. When he’s not working, he enjoys playing golf, reading, and honing his culinary skills. To learn more about Joe, connect with him on LinkedIn.













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Check the background of this financial professional on FINRA's BrokerCheck