Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equity indices were mostly higher last week where volatility was high in both directions.
    • S&P 500 +0.81% Dow -0.06%, Russell 2000 +1.52%, Nasdaq +1.08%1
      • The All-Country World Index declined 0.34%.1 
    • S&P 500 sub-sectors were mostly higher last week.
      • Healthcare, Real Estate, & Utilities led to the upside with gains over 2%.1 
      • Consumer Discretionary, Financials, & Consumer Staples were negative. 1 
    • The CBOE Volatility Index (VIX) dropped slightly to end at 27. 1 
  • US Treasury bond yields moved slightly higher last week.
    • US 2yr +0.02% at 1.56%, 10yr +0.03% at 1.95%, 30yr +0.02% to 2.27%.1 
    • The recent drop in the S&P 500 hasn’t brought the decrease in yields like in history. 
  • Commodities as an aggregate asset class were mixed last week during extreme volatility.
    • WTI Crude gained 0.78% after touching $100/barrel during the week. 1 
    • Gold declined 0.90% after spiking to $1,976 per ounce on Thursday. 1 
    • The US Dollar index rose 0.47%.1 
  • In our opinion, U.S. economic data was mixed last week.
    • The Fed’s preferred measure of inflation rose 5.2% since last year; its highest reading since ‘83. 1 
    • Consumer spending came in higher than expected despite higher prices. 1 
    • Rising mortgage rates & high prices continued to bring down measures of housing. 1 
  • An index of equities outside the US (FTSE All-World ex-US) declined 1.43%.1 


  • US stock markets finished the extremely volatile week mostly higher.
    • Geopolitical tensions initially sent equities much lower as they increased the uncertainty surrounding the post-Covid economic recovery. 
    • They sharply reversed course on Thursday and finished even higher on Friday. 
    • Small-caps & the Nasdaq led domestic measures higher with gains over 1%.1
      • Interesting to note that short interest in the Nasdaq recently breached a several year high while market breadth in Small-caps has reversed hard & sharply lower. 1 
  • S&P 500 subsectors finished the week mostly higher.
    • The defensive areas of the market led to the upside along with Tech. 
    • Consumer Discretionary led to the downside by a wide margin with a loss over 2%.1
      • Interesting to note that Financial underperformed last week despite the S&P 500 ending in positive territory. 
      • This is a dynamic we’ve discussed at length recently. 
  • The US Treasury market saw bond yields get whipsawed around during volatile trading.
    • The benchmark 10yr US Treasury hit a low of 1.85% during risk-off trading before finishing the week higher at 1.95%.1 
    • Overall, the recent drop in equities has seen 10-year yields stabilize but not drop like they have often historically. 1
      • Our belief is that on-going inflation concerns have underpinned yields. 
    • Confirming the uncertainty surrounding the direction of yields by market participants has been the massive inflows into cash-like short-term fixed income funds year-to-date. 1 
  • In regard to geopolitical events, the corresponding move in risk assets has historically been extremely difficult to anticipate.
    • Benchmarking the VIX volatility index to the news-based Geopolitical Risk Index developed by economists from the Federal Reserve Board shows a mixed relationship over time. 1 
    • Geopolitical events can drive rapid and sharp drawdowns in equities as well as a just a quick rebounds…as witnessed last week. 1
      • This is consistent with geopolitical shocks often being short-lived and driving a short term higher risk premium without leading to a material change to long-term growth expectations. 
    • Bottom line is we remain focused on the data and will let it continue to be our guide in determining when to deploy our sizeable cash position in most strategies.
  • Earnings season for the S&P 500 has seen 95% of companies report results. 1
    • 76% of companies have reported positive earnings & 78% beat revenue per share results. 1 
    • The blended earnings growth rate for the S&P 500 thus far is 30.7%.1 
    • The 12 month forward price to earnings ratio has come down to 18.8 which is more inline with the 5-year average of 18.6 for this gauge. 1 

Ryan A. Mumy, CFP®,
AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 2/25/2022

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