Stock prices dropped sharply this week as the SPDR S&P 500 ETF Trust (NYSE: SPY (NYSE:SPY)) completed its worst first half of any year in more than half a century.
The S&P 500 dropped 20.6% in the first six months of 2022, its worst performance in the first two quarters since 1970. The Dow Jones Industrial Average is also down more than 14% year-to-date, while the tech-heavy Nasdaq has fallen roughly 30%.
The biggest bearish catalyst for stock prices in 2022 has been persistently elevated inflation, but new data from the Bureau of Economic Analysis suggests the Federal Reserve may finally be making a bit of progress in combating soaring prices. On Thursday, the BEA reported the Personal Consumption Expenditures (PCE) index was up 4.7% year-over-year in May, down slightly from a 4.9% gain in April.
On Monday, several big U.S. banks announced they are raising their dividends after passing the Federal Reserve's annual stress test. Bank of America Corp (NYSE: NYSE:BAC) raised its dividend by 5%, Morgan Stanley (NYSE: NYSE:MS) raised its payout by 11%, Wells Fargo & Co (NYSE: NYSE:WFC) boosted its dividend by 20% and Goldman Sachs Group Inc (NYSE: NYSE:GS) hiked its dividend by 25%.
Kohl's Corporation (NYSE: NYSE:KSS) shares dropped 21% on Friday morning after the company withdrew from buyout negotiations with Franchise Group Inc (NASDAQ: FRG). Franchise Group had previously proposed a buyout of Kohl's at a price of $60 per share, but Franchise had reportedly been considering lowering its offer price to around $50 per share before talks broke down.
Beyond Belief: Retailer Bed Bath & Beyond Inc. (NASDAQ: BBBY) reported first-quarter earnings and revenue misses and announced the departure of its CEO Mark Tritton on Wednesday, sending the stock lower by more than 35% on the week.
Investors will get more quarterly earnings reports from Levi Strauss & Co. (NYSE: NYSE:LEVI), Helen of Troy Limited (NASDAQ: HELE) and WD-40 Company (NASDAQ: WDFC) on Thursday.
Consensus analyst price targets for the S&P 500 have dropped by 7% since peaking back in January, according to FactSet.
Economic Numbers: In the week ahead, investors will get key economic updates on Wednesday when Eurostat releases its May Eurozone retail sales report and on Friday when the U.S. Labor Department releases its June jobs report.
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