Stocks closed lower yesterday, lower for the month, lower for the quarter, and lower for the first half of the year.

In fact, regarding the latter, it was the worst first half performance in more than 50 years for the S&P, falling by nearly -21%, making it the worst start since 1970.

That time was also a period of high inflation like we're experiencing now.

Interestingly, the second half of that year saw the S&P up 27%.

Of course, that does not mean that's how it will go for the back half of 2022.

In fact, since 1957, negative first half performances had just as much of a chance for a negative back half performance as it did a positive one.

But that being said, it's important to look at where we are and what could be coming down the pike.

And on that note, I like our chances. Especially given that we have the strongest labor market in decades (unemployment is near a 50-year low, while there's literally millions more jobs available than there are unemployed people to fill them).

Moreover, the Fed is forecasting full-year GDP to come in at 1.7% this year, and 1.7% again next year. And St. Louis Fed President, James Bullard, in a recent interview, said he does not see a recession this year or next. And that he sees a "pretty good second half," driven by "strong consumption this year."

So we shall see.

In the meantime, stocks are down, but off their lows.

And PCE inflation for May, per yesterday's Personal Income and Outlays report, came in at 6.3% y/y, which was even with April's reading. And the Core PCE Price Index (which excludes Food & Energy) slipped to 4.7% y/y vs. last month's 4.9%.

The market has plenty of work to do.

And with valuations at the lowest level in more than 2 years, there's plenty of bargains out there.

Let's hope the market in the second half follows the same trajectory as 1970.

And today is day one.

Note: the markets will be closed on Monday, July 4^th, for Independence Day.

So we've got a 3-day long weekend ahead of us.

Trading will resume as normal on Tuesday.

Until then, have a profitable day today.

And enjoy the 3-day, 4^th of July weekend.

See you on Tuesday,