Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary

Data 

• U.S. equity indices ended the week mostly lower. 
  • S&P 500 -2.11% Dow -0.78%, Russell 2000 +0.52%, Nasdaq -2.63%1 
    • The Al-Country World Index sank 1.58%.1 
  • S&P 500 sub-sectors were mixed last week.
    • Energy led to the upside while Industrials & Materials also were strong. 
    • Financials & Technology led to the downside with losses of 2.2% & 1.3%.1 
  • The CBOE Volatility Index (VIX) gained 7% to close at 22.65. 1 

• The US Treasury market saw mixed results. 
  • US 2yr -0.06% at 2.45%, 10yr +0.22% at 2.82%, 30yr +0.18% to 2.92%.1 
  • The short-end moved lower while longer maturities rose on the back of inflation data. 

• Commodities as an aggregate asset class moved higher last week. 
  • WTI Crude rose 8.34% to $106.45/barrel. 1 
  • Gold gained 1.28%.1 
  • The US Dollar index rose 0.51%.1 

• In our opinion, U.S. economic data was mixed last week. 
  • US inflation data stayed red-hot. 1 
  • US retail sales rose for the month as a result of increased gasoline spending. 1 
  • Consumer sentiment unexpectedly jumped in April as job & wage growth outweighed inflation. 1 

• An index of equities outside the US (FTSE All-World ex-US) lost 1.24%.1 

Conclusion 

• US stock markets ended the shortened trading week mostly lower. 
  • Continued higher than expected inflation data at the consumer and producer levels along with yields continuing their record ascent seemed to dampen investors confidence in equities. 
  • The S&P 500 slipped 2.1% for its 2nd weekly loss while the tech-heavy Nasdaq led to the downside of major indices with a loss of almost 3%.1 
  • The small-cap tracking Russell 2000 squeaked out a gain in what appears to have been a large amount of short-covering by large institutional investors. 

• S&P 500 subsectors finished the week mixed. 
  • Many of the cyclical areas of the market led the performance leaders. 
    • Energy led by a wide margin as crude rebounded to end back about $105/barrel. 1 
  • Financials & Tech led to the downside by a wide margin. 
    • Several US banks reported earnings last week that underwhelmed investors at large. 1 
  • While the Tech sector has struggled of late for many reasons, one area has attracted a large amount of inflows so far this year. 
    • Semiconductor ETFs attracted $1.7B over the last week and $7.8B so far in 2022 despite being down over 20%.1 
    • The influx of cash into semiconductors, a cyclical sector that typically does well when the economy is doing well, highlights the faith of investors that the industry will recover from the supply-chain turmoil exacerbated by the pandemic. 
    • While sentiment seems to be strong, recent price action on semis looks relatively poor in the near term. 

• The US Treasury market saw mixed results last week as the yield curve continued its recent move to upward sloping. 
  • The short-end that mostly tracks Federal Reserve policy retreated last week for the first time in several weeks. 
    • This could be investors beginning to question just how many rate hikes the Fed might be able to pull off before having to stop tightening. 
  • Longer dated maturities that track future growth & inflation expectations continued their historical year-to-date rise. 
    • The benchmark 10-year US Treasury ended the week at 2.82%, sitting on the verge of a 3-year high. 1 
    • The almost $100B Aggregate Bond Market ETF that is meant to track the broad bond market for investors lost almost 1% last week and is now down almost 9% in ’22. 1 

• Earnings season has started and heats up this coming week. 
  • While only 7% of S&P 500 co’s have reported earnings so far, 13% will report this week. 1 
  • Investors seem to continue to watch for inflation’s impact on co’s revenues vs how much have been passed through to consumers. 
  • Will earnings show that the economy is in fact slowing from it’s red-hot post-Covid stimulus timeframe or that the economy is in fact in great shape on it’s own 2 feet? 

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

Contact: 828/855-9400
info@CIASonline.com or rmumy@bloomberg.net 

 1 Source: Bloomberg – 4/14/2022  

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