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If the current, dour complexion of the broad-market S&P 500
SPX,
-3.63%
holds through Friday’s close, the index, down 11.5% at last check, will register the most unsightly four-month period to start a calendar year since 1942, when it declined 11.85% (see table).

Year	First 4 Months % Chage
1932	-28.2
1939	-17.3
1941	-12.0
1942	-11.85
1970	-11.5
2022	-11.5 (as of 10:44 a.m. ET)
2020	-9.9
1973	-9.4
1960	-9.2
1962	-8.8
	Source: Dow Jones Market Data

The other major equity benchmarks aren’t faring much better. The technology-laden Nasdaq Composite Index
COMP,
-4.17%
is down 19%, which would mark its worst first four months since 1973, and a decline greater than 19.35% would represent the biggest such fall for the Nasdaq Composite since its advent in 1971.

The Dow Jones Industrial Average
DJIA,
-2.77%
is off 7.7% to date in 2022, which would be the worst start to a year for blue chips since the COVID pandemic took hold in the U.S. in 2020, when it declined a whopping 14.69%.

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Markets are slumping amid a litany of issues and sentiment that has been shaky, with a key measure of the U.S. economy’s overall health, gross domestic product, shrinking at a 1.4% annual rate in the first quarter, hamstrung by supply-chain bottlenecks and a widening trade deficit, though consumer and business spending were bright spots.

In fact, personal-consumption expenditures, or PCE, the Federal Reserve’s favored measure for reading inflation, increased a seasonally adjusted 1.1% in March from the prior month, the Commerce Department said Friday. 

Worries surrounding the invasion by Russia of neighboring Ukraine have been amplifying unease about the health of the global economy, as lingering battles with COVID-19 continue to hamstring parts of the world, notably China.

Out-of-control inflation and a Fed that is eager to stamp it out with higher benchmark interest rates also have been a recipe for ferocious price swings.

Check out: Fed’s half-percentage-point interest rate hike next week seen baked in the cake

However, there are some signs that inflation may be cooling. Overall inflation rose 6.6% in March from a year earlier, an acceleration from February, but the move represented a decline when factoring food and energy costs, with a rise of 5.2% last month from a year earlier, according to the government.

See: U.S. inflation rate surges to 6.6% based on PCE index—but there’s a silver lining

It’s worth noting that, bonds, traditionally perceived as a place of refuge for investors as stocks fall, haven’t offered much comfort. The iShares 20+ Year Treasury Bond ETF
TLT,
-1.30%
is down 19% so far in 2022 as benchmark 10-year Treasury yields
TMUBMUSD10Y,
2.906%
have climbed rapidly, nearing 3%. Bond prices fall as yields rise.

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Against that backdrop, is the outlook as grim as it has been over the past four months?

Baird market strategist Michael Antonelli said clients have been checking in intermittently amid the market tumult.

“We continue to remind them that the world is a crazy place, that there is almost never a time when returns are high and risks are low,” he offered.

“We also reiterate the fact that holding stocks in a bull market is practice, while holding them in difficult times is the Super Bowl,” he said.

Art Hogan, chief market strategist for National Securities, said that market moments similar to this current downturn test investors’ resolve, referencing the 17th-century Thomas Fuller observation that it’s darkest before the dawn. “We would offer up,” said Hogan, “that we are at or near that darkest place.”

There could be glimmers of light to come, in Hogan’s view, as the market becomes more inured to the Fed’s plan. The Federal Open Market Committee convenes its two-day policy gathering next week, May 3-4, when it is expected to hike rates substantially, possibly delivering an increase to the benchmark federal funds rate, presently in a range between 0.50% and 0.75%, by a half-percentage point or even more.

“Markets sold off in anticipation of the Fed’s first-rate hike in March, only to rally some 10% after the announcement,” Hogan said.

“We would not be at all surprised if we see a similar reaction after the May 4th communication, as the Fed policy fact will replace the Fed policy narratives that have been spooking the growth sector. Sell the rumor, buy the news,” the strategist said.

As far as strategies, Hogan said in a Friday research note, he recommends a “diversified equity allocation with a barbell approach with growth exposure on one end and economically sensitive cyclical exposure on the other end.”

A barbell strategy refers to an investing approach under which an investor invests across a risk spectrum ranging from higher risk to low risk, in an effort to achieve a more balanced portfolio.

Will the environment be better for stocks next month? Who knows.

But sentiment appears to be improving.

The final survey of U.S. consumer sentiment in April slipped to 65.2, but that still marked the highest reading in three months and the first improvement so far this year. 

That could mean more green shoots in May for segments of the economy. The most recent report produced by the University of Michigan reveals that Americans felt better about falling gasoline prices and were more optimistic about the future.