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The records Wall Street set for the first half of the year haven’t been good ones. The American economy is on the brink of recession, hurting by high inflation and rising interest rates. These economic ailments eat into American’s paychecks and reduce consumer confidence. All of this has led to corporate cutbacks and markets have tanked.

The first six Months of the year were the stock market’s worst first half of a year since 1970.  The sell-off has encompassed nearly every sector except energy this year. American monoliths like Apple, Disney, JPMorgan Chase and Target have all fallen more than the overall market.  And that, is only the half of it.

Bonds, which are typically seen as providing lower but more stable returns for investors have not done well in the first half. Bonds tend to be more sensitive to economic conditions, by reflecting shifts in inflation and interest rates more directly than stocks. The bond market indicates an even more worrisome sign about the economy.

“Make no mistake, this has been a torrid first half,” said Jim Reid, the head of credit strategy and thematic research at Deutsche Bank.

For the average investor with a diversified portfolio of stocks and bonds, it probably feels like “nothing worked,” said Victoria Greene, the chief investment officer at G Squared Private Wealth. “The venerable 60-40 portfolio hasn’t held up at all,” Ms. Greene said, referring to the mix of 60 percent stocks and 40 percent bonds that financial advisers traditionally suggest to investors to protect them from a downdraft.

Inflation now at a pace of a 40-year high, has been made worse by high energy and off prices due to conflicts in Ukraine. Rising prices has begun and will likely continue to hit consumer spending, the foundation of the US economy. As such, Economists have been raising the alarm, indicating the probability that the US economy is about to go into a recession.

Source: https://www.nytimes.com/2022/06/30/business/stock-market-worst-start-50-years.html