Market Update

Market Update: Volatile Financial Markets & First Quarter 2022 U.S. GDP Results

April 29, 2022

Volatility in the financial markets has picked up over the past few weeks and we expect volatility levels to stay elevated in the near term. In addition to well-known investor concerns such as decades high inflation, hawkish U.S. Fed policy and the war in Ukraine, we are in the middle of the first quarter 2022 corporate earnings reporting season. With about 50% of S&P 500 companies having reported so far, overall results appear to be coming in ahead of analysts’ expectations. Nevertheless, results and forward-looking guidance from some high-profile tech stalwarts, including Amazon, Apple, Google, and Netflix, have suggested supply bottlenecks, rising costs and waning demand are impacting results. In contrast, global payments giant Visa reported strong results and noted consumer spending trends remain solid. Overall, we would not be surprised to see some softening in corporate earnings expectation as we move through the year; however, we still expect positive S&P 500 earnings growth in 2022.

On the economic front, this week the U.S. Bureau of Economic Analysis reported that real GDP for the U.S. in the first quarter of 2022 decreased at an annual rate of 1.4%, well below the consensus estimate of 1.5% growth [1]. While the headline result appears to be a disappointment, the underlying details were much more encouraging. The poor reading was mostly due to a significant increase in imports (which detracts from GDP), while personal consumption expenditures, a key driver of the U.S. economy, increased at a 2.7% annual rate, an acceleration from both the third and fourth quarters of 2021 [2]. As highlighted in our recent quarterly Economic and Financial Market Outlook, despite significant headwinds, we remain optimistic that the U.S. economy can post better than average economic growth in 2022 given the strong but still ongoing improvement in the U.S. labor market.

Periods of heightened uncertainty and volatility in the financial markets can be stressful for investors. Your Washington Trust Wealth Management team is here to guide you through such times, and we invite you to reach out should you have any questions or concerns regarding the financial markets, economy, or your portfolio.

[1] Factset

[2] Bureau of Economic Analysis (, Gross Domestic Product, First Quarter 2022 (Advance Estimate), April 28, 2022.

Connect with a wealth advisor

No matter where you are in life, we can help. Get started with one of our experts today. Contact us at 800-582-1076 or submit an online form.

Contact us

This document is intended as a broad overview of some of the services provided to certain types of Washington Trust Wealth Management clients. This material is presented solely for informational purposes, and nothing herein constitutes investment, legal, accounting, actuarial or tax advice. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. Please consult with a financial counselor, an attorney or tax professional regarding your specific financial, legal or tax situation. No recommendation or advice is being given in this presentation as to whether any investment or fund is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors, or markets identified and described were, or will be, profitable.

Any views or opinions expressed are those of Washington Trust Wealth Management and are subject to change based on product changes, market, and other conditions. All information is current as of the date of this material and is subject to change without notice. This document, and the information contained herein, is not, and does not constitute, a public or retail offer to buy, sell, or hold a security or a public or retail solicitation of an offer to buy, sell, or hold, any fund, units or shares of any fund, security or other instrument, or to participate in any investment strategy, or an offer to render any wealth management services. Past Performance is No Guarantee of Future Results.

It is important to remember that investing entails risk. Stock markets and investments in individual stocks are volatile and can decline significantly in response to issuer, market, economic, political, regulatory, geopolitical, and other conditions. Investments in foreign markets through issuers or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical, or other conditions. Emerging markets can have less market structure, depth, and regulatory oversight and greater political, social, and economic instability than developed markets. Fixed Income investments, including floating rate bonds, involve risks such as interest rate risk, credit risk and market risk, including the possible loss of principal. Interest rate risk is the risk that interest rates will rise, causing bond prices to fall. The value of a portfolio will fluctuate based on market conditions and the value of the underlying securities. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment loss. Investors should contact a tax advisor regarding the suitability of tax-exempt investments in their portfolio.