Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  •  U.S. equity indices finished the week lower for the first time in 5 weeks.

    • S&P 500 -1.16% Dow -0.16%, Russell 2000 -2.85%, Nasdaq -2.62%1

      • The All-Country World Index moved lower by 1.64%.1 

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

      • Energy, Consumer Staples, & Utilities were the only positive sectors last week. 1 

      • Materials led to the downside with a loss of 2.4% followed by Real Estate & Tech. 1 

    • The CBOE Volatility Index (VIX) moved higher by 5% to close just above 20. 1 

  • US Treasury bond yields rose on the longer maturities last week as the short-end was flat.

    • US 2yr -0.01% at 3.23%, 10yr +0.14% to 2.99%, 30yr +0.11% to 3.23%.1 

    • The curve steepened for the 2nd straight week. 

  • Commodities as an aggregate asset class were higher last week.

    • WTI Crude lost 2.37%.1 

    • Gold plummeted -3.09%.1 

    • The US Dollar index skyrocketed higher by 2.33%.1 

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

    • Retail sales were unexpectedly flat in July, indicating consumer spending has held up. 1 

    • Industrial production was better than expected in July even as confidence faded. 1 

    • Measures of the housing market continued to lag. 1 

  • An index of equities outside the US (FTSE All-World ex-US) sank -2.88%.1 


  • US Equities took a breather from their recent extended run higher as weak data out of China and the latest Federal Reserve minutes seem to give participants a pause.

    • Growth oriented areas of the market led to the downside with the small-cap tracking Russell 2000 and Nasdaq sinking over 2.5%.1 

    • The S&P lost just over 1% after testing the technically significant 200 day moving average. 1 

    • Despite last week, the double digit advance for the domestic markets in July & August has put US stocks on track for one of their best summers on record. 

  • S&P 500 subsectors were by and large firmly lower last week.

    • Defensive areas of Utilities & Staples led along with Energy.

      • Energy was helped by the news that Warren Buffett’s Berkshire Hathaway won approval from regulators to buy as much as 50% of the energy company Occidental. 1 

    • Materials led sectors lower seemingly on the back of China’s economic issues.

      • Real Estate, Financials, & Tech also lost over 1.5%.1 

  • US Treasury yields on the longer end rose slightly last week as the bond market digested the latest Federal Reserve minutes that were released.

    • The short-year rates were unchanged as the market seems to be waiting on this week’s Jackson Hole meeting where Fed Chair Powell will speak on Friday. 

    • The yield curve steepened as the Fed minutes confirmed committee members remaining committed to raising rates until inflation drops meaningfully. 

  • The actual minutes of the Fed’s last policy meeting in July, released last week, showed that some participants expected that once the policy rate “had reached a sufficiently restrictive level,” it would need to stay there “for some time to ensure that inflation was firmly on a path back to 2%.”1

    • This seemed to put water on market participants that had begun to expect rate cuts to come shortly after the Fed stopped hiking rates as soon as Q3 2023. 1 

    • We believe all eyes will be on Chair Jerome Powell when he speaks this Friday at the annual gathering of central bankers at Jackson Hole.

      • He’s expected to re-state the Fed’s resolve to keep raising rates to get inflation under control, though he’ll probably stop short of signaling how big officials will go when they meet next month. 

    • In our opinion, with the steep rise in the inflation of utilities, gasoline, food, & electricity as a backdrop, it is unlikely that the Fed will become dovish and will likely push back on the expectations for rate cuts next year.

      • Furthermore, we think the Fed has gotten some breathing room to be more hawkish given the recent steep rise in asset prices. 

  • The US Dollar had a massive move higher last week with a gain of over 2%.1

    • Despite all the talk about the US Dollar losing its reserve status; there is no evidence of this happening yet. 

  • Recent shows that Saudi Arabia & China have recently been massive buyers of the US Dollar in order to stabilize their own respective economies. 1 

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 8/19/2022  

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