A new economic and financial market narrative was not what market participants were looking for in June.  Over the past couple of weeks, the inflation story has morphed into a growth slowdown story.

The monthly returns for May do not quite paint an accurate picture of the real ride investors endured over the past several weeks. All major U.S. indices ended the month flat, except for the Nasdaq, which declined 2%. For the majority of the month, the path of least resistance was lower.

Last month, we discussed equity markets finding their footing amidst the pervasive negativity roiling through financial markets in early March. Well, that toehold was not strong enough to push us higher through April.

After back-to-back months of negative returns to start the year, the S&P 500 found its footing in mid-March following a shaky start to the month. Over a nine-trading day span, the S&P 500 advanced by 11%, which paled in comparison to the Nasdaq’s 16% rip higher.

The volatility in financial markets that began a little more than 3 months ago took another leg higher in the back half of February and into the first week of March. The swings in equity prices have not been for the faint of heart.

The inevitable has become reality. For months, we have spoken and written about the likelihood of the markets being on the precipice of entering a new volatility regime.

For the third straight year, U.S. equities ended meaningfully higher.  The S&P 500 led the way amongst major U.S. indices, soaring nearly 27%. 

U.S. equity markets ended November with a whimper, which continued into the first few trading days of December. The major U.S. indices made all-time highs during November.

U.S. equity markets got back on track in October as all major indices clawed back their losses and then some from September.  The S&P 500 gained 6.9% and closed at an all-time high.

For much of the past few months, we have written extensively on the path of least resistance being higher in equities, regardless of the worries stacking up.  In fact, we went so far as to describe the U.S. equity market as being very much like a honey badger.