Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  •  U.S. equity indices moved higher last week despite rising interest rates.

    • S&P 500 +1.95% Dow +0.77%, Russell 2000 +2.44%, Nasdaq +4.56%1

      • The All-Country World Index was higher by 1.31%.1 

    • S&P 500 sub-sectors were mixed last week.

      • The year-to-date laggards led with Tech & Cons Discretionary gaining over 4%.1 

      • The best performers so far this year led the decliners as Energy & Utilities lost 2%.1 

    • The CBOE Volatility Index (VIX) declined 8% to end below 25. 

  • US Treasury bond yields moved higher across the board last week.

    • US 2yr +0.26% at 3.09%, 10yr +0.21% to 3.10%, 30yr +0.15% to 3.27%.1 

    • The 2yr/10yr spread inverted for the longest stretch since 2019 last week. 1 

  • Commodities as an aggregate asset class continued their recent move lower.

    • WTI Crude lost 3.48% to end @ 104.66. 1 

    • Gold lost -3.65%.1 

    • The US Dollar index rose 1.67%.1 

  • In our opinion, U.S. economic data was mixed last week.

    • The US added more jobs in June than expected at +372k. 1 

    • Wage inflation came in up 5.1% over the last year. 1 

    • Factory orders beat expectations while the services sector slowed. 1 

  • An index of equities outside the US (FTSE All-World ex-US) underperformed at -0.26%.1 


  • Caution remained for equity markets as domestic indices rose across the board, led by year-to-date underperforming areas.

    • The tech-heavy Nasdaq led domestic markets higher with a gain of 4.56%.1

      • This was despite interest rates exploding higher during the week. 

    • A strong jobs report boosted expectations of the Fed staying aggressive on it’s rate hikes.

      • The Fed’s next policy decision will be on July 27th and according to their June minutes, officials made it clear their next rate hike level is not set in stone. 

      • In our opinion, all eyes remain on the Fed. 

  • S&P 500 subsectors were truly mixed last week.

    • Consumer Discretionary & Tech led to the upside with gains of over 4.25%.1

      • The other 3 sectors that were positive gained less than a percent. 

    • Utilities & Energy led to the downside with losses of 2.83% & 2.25% respectively. 1 

    • As price action last week was counter to the predominant trend of 2022, the question remains: 

      • Is the market repricing forward expectations for returns OR are large institutions deleveraging and thereby covering shorts & taking gains from winners? 

  • The VIX volatility index declined 8%. 1

    • It remains muted despite the large drawdown in equities. 

    • Interesting to note that the current VIX is trading below historical correlations to the 3 mo expectation for volatility as well as the MOVE index which tracks bond market volatility. 1 

  • US government interest rates moved higher across the maturity curve last week.

    • Yields spikes by at least 0.15% across the curve as the 2/10yr inverted. 1

      • This means the 2yr is yielding more than the 10yr. 1 

      • This relationship stayed inverted for 4 days last week for the longest inversion since ’19. 1 

    • We believe Friday’s stronger than expected jobs report fueled concerns that the Fed will have to toughen its hawkish stance to cool a hot labor market as well as inflation.

      • This increases the probability of dragging the US economy into a recession. 

  • Commodities continued their recent slide lower last week.

    • We find this latest commodity sell-off de-linked from physical fundamentals and driven by financial liquidation. 

    • Inventories of energy and metals continue to fall from already uncomfortably low levels as demand remains above supply in all cyclical commodities, except iron ore. 1 

    • In our opinion, scarcity thus paints a fundamentally constructive outlook for commodities despite the rising probability of a US and European recession over the coming 12 months. 

  • Non-US equities moved lower last week as the US Dollar continued is run higher. 1

    • Chinese stimulus is now taking center stage in the mainland.

      • Stimulus is seen playing a more important role in Chinese authorities’ policy mix this year with local gov’ts facing slumping revenue and bigger spending on Covid controls. 

    • Counter-cyclical stimulus is already starting to show up in some areas of Asia1 as tightening continues from Western governments.

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

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 7/8/2022  

Disclosures: The information provided in this paper is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product, and should not be construed as investment, legal or tax advice. Capital Investment Advisory Services, LLC makes no warranties with regard to the information or results obtained by third parties and its use and disclaim any liability arising out of or reliance on the information. This information is subject to change and, although based on information that Capital Investment Advisory Services, LLC considers reliable, it is not guaranteed as to accuracy or completeness. Source information is obtained from independent financial data suppliers. For investment related terms definitions, please visit: Past performance is no guarantee of future results. Additional information about CIAS and its Form ADV Part 2A are available on the SEC’s website at Advisory services through Capital Investment Advisory Services, LLC Securities may be offered through Capital Investment Group, Inc. Member FINRA/SIPC Both firms located at 100 E. Six Forks Rd. Suite 200, Raleigh, NC 27609 919-831-2370