Stocks Decline for 2nd Straight Week Amid Recession Fears

Good evening,

Stocks continue to sink, dragging markets further down for a second consecutive weekly loss. The S&P 500 closed Friday down 19.68% on the year, despite a CPI print Tuesday showing that inflation is cooling. Core CPI, which excluded the more volatile food and energy components, rose +0.2% month-over-month, the smallest advance in 15 months (August 2021) and below the consensus of +0.3%. 

But Wednesday, after the Federal Reserve raised its key interest rate for the seventh time this year, Chair Jerome Powell said more hikes are in store. “The inflation data in October and November show a welcome reduction,” he said, “but it will take substantially more evidence to give confidence in a sustained downward path.”

That was exacerbated Thursday when the November retail sales report was unexpectedly weak, prompting concern over the health of the U.S. consumer, which has been the driver of a better-than-expected economy in 2022. It has been a challenging year for most investors, marked by volatility. Consider:

Thursday marked the tech-heavy Nasdaq’s 84th move of 2% or more in either direction this yearThat’s more than in 2008 and on pace for the most such moves since 2002After years of easy money and stimulus, volatility has gripped marketsAll t...