Financial Market Commentary

Monthly Market Commentary

January 2022 Edition

These monthly market commentaries share a synopsis of the U.S. financial markets with intelligent insights.

Latest Commentary:

Happy New Year,

Did the global investment markets really need to receive a big lump of coal to end December as a reminder to investors of just how bad 2022 was for almost everyone? Coming into December, equity markets were up 14% for the quarter and bonds were delivering positive returns, providing a small dose of optimism.  Then came a series of negative announcements and market events, sending stocks back down and causing bond yields to rise again, dashing hopes for a year-end rally. 

 While the quarter did not end the way most investors were hoping for, the Q4 returns were positive in most segments and sectors both in the US and Non-US.  The continued surprise in Q4 was the stronger performance of EAFE (17.3%) relative to the S&P 500 (7.6%).  Some of this is driven by a weakened USD and the fact that EAFE does not hold names such as Tesla, Meta, or Amazon which weighed heavily on the S&P return.  However, many sectors such as financials and industrials in EAFE outperformed their peers in the US which is a positive sign, reflecting potential improvements or at least stabilization in economies around the globe. 

 Putting 2022 into historical context, the -18.1% S&P 500 return is the 7th worst annual return in the last 100 years.  Pair that with the -13.1% return of the Bloomberg Aggregate Bond index which was the worst annual return in the more than 47 years of index results and 2022 was one of the worst years for investor portfolios in the last 80+ years.  Among the many drivers behind this poor year was the sharp rise in interest rates caused by the unprecedented rate hiking by the US Fed and other central banks.  Overall, 2022 was difficult and challenging year for investors.

 Attached are both the December 2022 Investment Market Performance Recap and the 2022 Calendar Year Investment Market Performance Recap.

 Here are a few high-level comments on what occurred across public investment markets during the month, quarter, and year:


  • The S&P 500 was down 7.8% in December, up 7.6% in Q4, and down 18.1% for the year. 
  • Bonds were modestly down in December, up 1.9% in Q4, and down 13% for the year.   

Domestic Equity 

  • After rallying through November, equity markets reversed course hard in December as economic uncertainty grew and investors became less optimistic the worst was over.  Q4 returns were favorable across all market segments which helped to modestly soften the impact of 2022's deeply negative returns. 
  • Value stocks outperformed growth stocks in the quarter and year at somewhat historic levels.  While the disparity is limited between large and small cap indexes, it is more noticeable in the 6.7% return differential between the S&P 500 Cap Weighted and Equal Weighted indexes.  This is the result of the significant declines in many of the largest index names during 2022.

International and Global Equities 

  • The outperformance of foreign stocks vs. US stocks that started in November continued in December, resulting in a 10% outperformance for Q4.  This is explained both by the better relative performance of many sectors within EAFE as well as the lack of exposure to US tech names that fell sharply in the period.
  • Emerging Market equity returns were in line with other foreign markets in December though behind EAFE for Q4.  Chinese stocks were among the best performers as sentiment rose on the relaxing of Covid policies. 

Fixed Income Markets 

  • After rising to start the quarter, then falling mid-quarter, rates finished the quarter in an upward trend.  For the quarter, bond markets delivered positive returns, but only marginally reduced the negative YTD results across all major indexes.  The yield on the 10YR UST rose 2.3% in 2022 while the 2YR UST rose 3.7%.

Specialty Markets 

  • REITs lagged broader equity markets in Q4 while trailing by 7% for the year.  Commodities were the clear winners for the year, though most of the returns occurred early in 2022. 

US Equity Sectors

  • Reflecting the negative performance of some of their largest constituents, the Communication Services and Consumer Discretionary sectors were the only negative performing in Q4.  Value and defensive sectors held up best for the quarter and year, with Energy the top performer in both periods. 

View December 2022 Investment Market Performance Recap

View 2022 Calendar Year Returns


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Scott Krase
Wealth Manager
Connor & Gallagher OneSource (CGO)

Securities offered through LPL Financial, Member FINRA & SIPC.  Investment advisory services offered through Global Retirement Partners, LLC DBA Connor & Gallagher OneSource, an SEC registered investment advisor.  Connor & Gallagher OneSource and Connor & Gallagher Benefit Services are separate entities from LPL Financial.

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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of August 3, 2022.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. Connor & Gallagher OneSource doesn’t provide research on individual equities. All information is believed to be from reliable sources; however Connor & Gallagher OneSource makes no representation as to its completeness or accuracy.

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