The Financial Quarterly

1st Quarter 2022

Kevin Murray
Murray Financial Services

The first quarter of 2022 was rocky, the worst we’ve seen since 2020.1 Inflation, Russia’s brutal invasion of Ukraine, and concerns about Federal Reserve interest rate hikes all contributed to the volatility and market losses. However, let’s also keep in mind that markets have come a long way in the past few years and quarterly losses are part and parcel of being a long-term equity investor.

Let's take a look at how markets performed and what we might look forward to in the months to come.

Looking Back

How Did Markets Perform Last Quarter?

S&P 500


The broader U.S. market slumped on economic and geopolitical concerns.1



The tech-focused NASDAQ fell into a bear market in Q1 on interest rate fears and concerns about major tech players.2

DOW 30


Blue chip stocks also dropped in Q1 along with the broader market.1

Looking Ahead

What Can We Expect Six to Nine Months Ahead?

This is a challenging time to make predictions about the future. For each economic gauge below, we've highlighted risks and opportunities.

U.S. Economic Outlook

Negative Positive

Opportunities: A strong labor market, high productivity, and robust business profits could drive continued growth.
Risks: High, persistent inflation, interest rate hikes, and war in Ukraine could tip the U.S. into recession.3

Equity Outlook

Negative Positive

Opportunities: Corporate profits remain strong, driving fundamental growth.
Risks: High equity valuations, rising interest rates, and geopolitical uncertainty are likely to weigh.4

Consumer Sentiment

Negative Positive

Opportunities: A strong job market, high home values, and still-low interest rates could prop up sentiment.
Risks: High prices and worries about war are likely to dent confidence.5

Monetary Policy

Negative Positive

Opportunities: The Federal Reserve could manage a “soft landing” and achieve stable growth with lower inflation.
Risks: Execution risk is high, meaning the Fed may fumble this complex operation.4

Geopolitical Risk

Negative Positive

Opportunities: Negotiations may yield a peaceful resolution.
Risks: War, death, damage, and economic disruption may continue, causing continued uncertainty and strife.6


Negative Positive

Opportunities: If energy and commodity prices stabilize and supply chain tangles resolve, inflation could slow.
Risks: Price increases and consumer expectations of high inflation could persist, pushing the economy into a feedback loop.7

"Markets had a rocky start to the year, and it's hard to predict what could happen in the months to come."

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Bottom Line

Key Takeaways for Savvy Investors

There’s a lot of uncertainty facing us this year, and it’s not likely to let up any time soon. Overall, I'm cautious about where the economy and markets will go this quarter.

Could we be facing a bear market or recession? Absolutely. Given the risks highlighted above, it’s a real possibility this year. However, we also have a strong economic engine that could shrug off these risks and keep chugging away.

Times like these favor flexibility, resilience, and a focus on long-term goals.

Bottom line, I'm keeping a close eye on market conditions, as continued uncertainty could drive sudden changes, and I’ll be in touch as needed.

Questions? Please reach out. I'd be happy to chat.

Kevin Murray
Murray Financial Services