Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equity indices were mostly lower last week as Fed policy remains up in the air.
    • S&P 500 -0.62% Dow +0.11%, Russell 2000 -1.70%, Nasdaq -1.50%1
      • The All-Country World Index lost -0.52%.1 
    • S&P 500 sub-sectors ended the week mostly lower.
      • Defensive Utilities, Healthcare, & Staples were the only positive sectors. 1 
      • Consumer Discretionary & Real Estate led to the downside. 1 
    • The CBOE Volatility Index (VIX) was slightly up last week finishing just above 23. 1 
  • US Treasury bond yields were mixed last week as the yield curve inverted further.
    • US 2yr +0.17% at 4.51%, 10yr flat to 3.82%, 30yr -0.11% to 3.92%.1 
    • The 2yr yield exceeded that of the 10yr & 30yr by the most in over a generation. 1 
  • Commodities as an aggregate asset class were higher last week.
    • WTI Crude declined -9.95%.1 
    • Gold lost -1.19%.1 
    • The US Dollar index gained 0.64%.1 
  • In our opinion, U.S. economic data was mixed last week.
    • Producer Prices came in around expectations at a yearly gain of 8%.1 
    • Retail sales jumped 1.3% for the month but household debt surged the most in 15 years. 1 
    • Unemployment claims remained low despite announced layoffs starting to pick up speed. 1 
  • An index of equities outside the US (FTSE All-World ex-US) declined -0.73%.1 


  • US Equities finished the week lower as optimism faded regarding the Federal Reserve pivoting their aggressive rate hiking policy following numerous committee members comments.
    • The growth-oriented Nasdaq & Russell 2000 led to the downside with losses over 1.5%.1 
  • Markets this week will be looking to the minutes of the most recent Federal Reserve meeting for more clues on the course of rate hikes.
    • Multiple members last week dashed hopes for a lower terminal rate by the Fed by reiterating their final rate coming in at least 1% higher from current levels. 1 
    • We reiterate our thoughts from the summer that the bigger risk for the Fed is hiking too little as opposed to hiking too much and sending markets/the economy into a tailspin.
      • Basically, Quantitative Easing/Stimulus packages are here to stay. 
  • The Conference Board’s Leading Economic Index fell by 0.8% in October for its worst monthly drop since the Covid recession in 2020. 1
    • This broad economic measure fell further below its 18-month moving average while its rate of change also further declined by 2.2%.1
      • Readings like these from the 2 measures of the LEI have historically pointed to the economy already being in a recession. 
  • Despite the renewed hopes for no recession or a slowdown to corporate earnings, the crude oil markets continue to show weakness.
    • Rising Covid cases in China as well as concerns about recession have driven oil lower on further reduced demand around the globe. 
    • We do not view this as bullish for equities in the short-term. 
    • In general, cyclical sectors have outperformed defensives notably since the summer…if an economic slowdown accelerates, we anticipate this to roll-over 
  • The US Treasury market movements further reiterated uncertainty around the future of the domestic economy last week.
    • The 2yr, a proxy for near-term expectation of the Federal Reserve’s rate, climbed last week and exceeded the 5, 10, & 30yr UST yields by the most in a generation. 1
      • This historically has been a leading signal of a coming recession. 
    • At the same time the 2yr yield rose, the 10yr yield was flat and the 30yr actually declined. 1
      • The 10yr yield dripped below the Fed’s target range for the first time in this tightening cycle1 which is another sign that investors foresee economic damage that will necessitate rate cuts by the Fed in the future. 
  • Despite what any hopeful commentary or historical charts may be shown, the economy has slowed down tremendously and corporate earnings will be challenged moving forward.
    • While a recession happening is still questioned by many, we agree with those who now believe it’s a matter of when & how bad. 
  • Without answers today, we must wait patiently for more data and avoid conclusions driven by dogma.
    • Said another way…data driven decision making looking through the windshield, not the rearview mirror. 

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 11/18/2022  

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