Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equity indices bounced back as lagging areas of the markets led things higher.
    • S&P 500 +3.66% Dow +2.66%, Russell 2000 +4.06%, Nasdaq +4.14%1
      • The All-Country World Index rose +2.97%.1 
    • S&P 500 sub-sectors were all higher last week.
      • Consumer Discretionary & Materials led to the upside with gains over 5%.1 
      • Energy was the worst performing sector at +0.80%.1 
    • The CBOE Volatility Index (VIX) moved lower by 10% to end at 22.79. 1 
  • US Treasury bond yields continued their recent rise.
    • US 2yr +0.17% at 3.55%, 10yr +0.13% to 3.32%, 30yr +0.12% to 3.46%.1 
    • Fed Chairman Powell affirmed expectations for another 0.75% rate hike in a speech. 
  • Commodities as an aggregate asset class were down last week.
    • WTI Crude lost -0.91%.1 
    • Gold gained +0.35%.1 
    • The US Dollar index declined -0.52%.1 
  • In our opinion, U.S. economic data was mixed last week.
    • OPEC cut supplies which was seen as symbolic that they’ll defend oil prices at current levels. 1 
    • Unemployment claims dipped & Consumer Credit rose less than expected. 1 
    • Mortgage applications plunged as the 30yr rate rose to their highest levels since 2008. 1 
  • An index of equities outside the US (FTSE All-World ex-US) gained +2.49%.1 


  • US Equities snapped a 3-week losing streak and rose across the board last week and posted solid gains despite rising interest rates.
    • The Nasdaq led to the upside with a gain of over 4% while the S&P 500 rose over 3.5%.1 
    • The S&P 500 also crossed its 100-day moving average1 which is viewed as a technically significant level by many traders. 
    • Interesting to note that the year-to-date laggard areas of the markets led to the upside as short-sellers appeared to be caught wrong-footed as stocks bounced back.
      • The need to cut losses and buy-back shares seems to have forced an unwind that led to an 8.2% jump last week in the Goldman tracked basket of the most-shorted stocks. 1 
  • All S&P 500 sectors ended the week higher.
    • Consumer Discretionary led to the upside with a gain of 5.78%.1 
    • Energy was the weakest performer at +0.80% despite weakness in crude oil. 1 
    • This positioning action is firmly opposite of what has been the trend for much of the year and as such, we’ll continue to watch closely for any signs of a trend change.
      • We remain skeptical as Consumer Discretionary leading means the consumer is in great shape and their spending will move higher despite higher costs. 
  • US Treasury yields moved higher across the maturity curve last week.
    • The short-end 2yr moved slightly more than the longer 10yr & 30yr issues. 1 
    • The European Central Bank hiked interest rates by 0.75% last week. 1
      • This is its largest hike since the inception of the Euro, clearly signaling that its direction and speed of hikes is clear between now and the end of the year. 
    • Several Federal Reserve members spoke last week, all seemingly indicating another 0.75% hike was on the way at their next meeting. 1 
  • While the direction of stock markets over the next 6 months is up for debate, financial conditions by all measures are tightening.
    • With the Fed Funds rate expected to finish the year around 4% other measures of the Financial Conditions Index have already tightened significantly.
      • Treasury Yield have climbed, credit spreads have widened, the US Dollar has strengthened, & equity valuations have compressed. 1 
    • While tighter financial conditions do not mean equities sell-off, it does mean the areas of the markets that can be expected to outperform will change. 
    • If one is bullish on stocks and does not expect multiple expansion from loose monetary policy/financial conditions than it all comes down to earnings growing.
      • This is the great unknown at present time…companies abilities to grow earnings in tighter financial conditions. 
  • Non-US equities moved firmly higher last week as the US Dollar index showed weakness.
    • The USD index is largely weighted to the Euro and the ECB’s rate hike helped cool the dollar. 
    • While the ECB has started to go to work on inflation, asset managers have been bailing on the Eurozone all year; they’ve yanked $83 billion in investment in the area so far in 2022. 1 

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 9/9/2022  

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