Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equity indices collapsed further last week following the Federal Reserve’s September meeting.
    • S&P 500 -4.57% Dow -4.00%, Russell 2000 -6.53%, Nasdaq -5.07%1
      • The All-Country World Index declined -5.03%.1 
    • S&P 500 sub-sectors were all lower last week.
      • Energy led to the downside with a loss of 10% as it caught-down to the price of oil. 1 
      • Consumer Discretionary, Real Estate, Materials, & Financials all lost over 6%.1 
    • The CBOE Volatility Index (VIX) briefly touched 32 Friday before ending at 29.83. 1 
  • US Treasury bond yields moved higher last week across the yield curve, led by the short-end.
    • US 2yr +0.34% at 4.20%, 10yr +0.25% to 3.70%, 30yr +0.09% to 3.61%.1 
    • Yields all rose to levels last seen more than a decade ago. 
  • Commodities as an aggregate asset class were firmly lower last week.
    • WTI Crude lost -7.01%.1 
    • Gold sank -1.89%.1 
    • The US Dollar index rose 2.96%.1 
  • In our opinion, U.S. economic data was mixed last week.
    • The Federal Reserve hiked rates by another big 0.75% increase at their meeting last week. 1 
    • Homebuilder sentiment fell to the lowest level since ‘14 as home sales came in down 20% YoY. 1 
    • Flash PMIs contracted for the 3rd straight month. 1 
  • An index of equities outside the US (FTSE All-World ex-US) sank -6.11%.1 


  • US Equities sank further last week following the Federal Reserve hiking rates by another 0.75% and signaling their more aggressive pace of hikes will continue.
    • The Fed adjusted their projection of reaching a 4.4% level on their Fed Funds rate as opposed to a 3.4% projection at their June meeting. 1
      • We believe this, along with their continued hawkish tone, was what primarily drove the accelerated equity sell-off and spiking interest rates last week. 
    • All major US indices lost at least 4% while the small-cap tracking Russell 2000 led to the downside with a loss of 6.53%.1
      • Equities have now fallen by at least 3% in 4 of the last 5 weeks. 1 
      • Friday saw a rare major distribution day with 90%+ down volume in trading. 1 
  • All S&P 500 sectors ended the week lower as selling was very broad-based.
    • Energy led to the downside with a loss of over 10% as the sector followed commodities markets in general lower as investors rushed to shed risk in the face of mounting global recession fears. 
    • Industrials, Materials, Financials, Consumer Discretionary, & Real Estate all lost over 5%.1 
  • US Treasury yields shot higher across the maturity curve last week.
    • The short-end 2yr moved higher to end at 4.2%.1
      • The 2-year finished last week having its yield rise for 12 straight days; this streak of losses hasn’t been seen since 1976. 1 
    • The current drop in the bond market is truly unprecedented having declined by the most going back at least to the 1960’s. 
  • The Bloomberg Commodity Spot Index, which tracks futures contracts for everything from oil to copper and cotton, settled 3.1% lower on Friday to a level not seen since July. 1
    • The measure has lost more than 20% since peaking in June. 1 
    • The US Dollar ended the week higher by almost 3% last week. 1 
    • The US dollar’s march to record highs is a drag on commodities priced in the greenback because it reduces other currencies’ buying power, further eroding the demand outlook. 
  • Central banks around the globe seem to be racing each other to step up their fight against inflation at the cost of economic growth.
    • Worries about whether there will be a recession have turned into bets on just how bad the pain will get just as the 2yr/10yr inverted further last week. 
    • From a historical standpoint, prior bear markets that hit during full-blown recessions have shown to be brutal for the S&P 500.
      • Since World War II, the average decline of the S&P is 35% when these happen in concert. 1 
  • The Fed will be out in full force this week with talks from various officials.
    • The market will be watching for clues as to whether policy makers are leaning towards a 4th blockbuster hike. 
    • The week is also full of economic data including Friday’s release of the Core PCE Price Index which is a preferred inflation gauge by some Fed members. 
    • We remind folks that until there is stabilization in the bond & currency markets, any short-term upward price movements in the equity markets should be dismissed. 

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 9/23/2022  

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