Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities ended the week mixed as bets on higher interest rates seemed to weigh on investors.
    • S&P 500 -0.19% Dow -0.13%, Russell 2000 +1.48%, Nasdaq +0.59%1
      • The All-Country World Index declined -0.28%.1
    • S&P 500 sub-sectors were mostly lower last week.
      • Consumer Discretionary, Staples, Industrials, & Utilities were the lone gainers. 1
      • Energy led to the downside by a wide margin followed by Real Estate. 1
    • The CBOE Volatility Index (VIX) declined 2.78% to finish right at the critical 20 level. 1
  • US Treasury bond yields once again moved higher across the curve last week.
    • US 2yr +0.10% at 4.60%, 10yr +0.08% to 3.82%, 30yr +0.05% to 3.88%.1
    • Participants are beginning to price in higher Fed rates which is being reflected in bonds.
  • Commodities as an aggregate asset class were lower last week.
    • WTI Crude sank -4.26%.1
    • Gold declined -1.28%.1
    • The US Dollar index rose +0.24%.1
  • In our opinion, U.S. economic data was mixed last week.
    • US Consumer & Producer price indices both can in higher than expected. 1
    • Retail sales came in stronger than expected as consumer debt reached a new record. 1
    • Housing saw an increase in buyer demand on lower mortgage rates. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined by -0.12%.1


  • US Equities ended the week mixed with the Nasdaq & small-cap Russell 2000 ended positive.
    • The Russell shot higher by 1.48%, leading domestic indices higher. 1
    • After starting the year with a 6.2% January surge, the S&P 500 is essentially flat this month. 1
      • Much of the January run higher appears to have been short-sellers covering bearish bets followed by buying by systematic investors focused on near-term price signals.
      • The risk appears to be mounting that bets on higher interest rates for longer are wearing on the market’s resilience.
  • International equities were little changed last week after the US Dollar rose for the 3rd straight week. 1
    • Non-US equities outpaced much of the US markets to begin the year but the reemergence of US Dollar strength has paused this trend.
  • US equity sectors saw mixed trading last week.
    • Discretionary led to the upside with a gain of 1.63%.1
      • This week is a big week for retailers earnings as they provide critical insight into consumer demand, economic growth, & corporate America’s profitability.
      • All eyes will be on their managing of inflation & swollen inventories from 2022.
    • Energy led to the downside with a loss of over 6%.1
      • Volatility is returning to the oil markets as investors wrestle with mixed data.
  • US Treasury yields continued their recent run higher as all issues on the maturity curve went up.
    • Much of the recent move is a result of the market repricing what the Federal Reserve is anticipated to do with interest rates.
    • For instance, only 1 month ago, few traders expected the central bank to raise rates again after March. By Friday — following a series of indications that inflation isn’t slowing as rapidly as anticipated — an increase in May was fully priced in with 70% odds for another one in June. 1
      • This massive & quick repricing has been largely ignored by equity markets.
  • For the first time in nearly two decades, investors can earn more than 5% on some of the safest debt securities in the world.
    • 6 month US Treasuries this week became the 1st US gov’t obligations since 2007 to yield more than 5% as traders ramped up expectations for Fed hikes. 1
    • Returns on 6 month bills are now close to the earnings yield on the benchmark S&P 500 index. 1
  • 82% of S&P 500 companies have reported 4th quarter earnings so far. 1
    • 68% have reported positive earnings while 65% have beaten revenue expectations. 1
    • The blended earnings decline for the S&P 500 is at -4.7%.1
    • Profit growth has recently turned negative on a year-over-year basis.
      • This has happened only 4 other times in the past 23 years and has never been a positive encouraging sign for stocks. 1
  • One group that’s been buying relentlessly is retail traders.
    • Individual investors purchased a net $32 billion in US shares over the 21 sessions through Thursday, a record for such a span, Vanda Research data show.
    • This activity along with the use of short dated leveraged options is adding to the noise & creating a further potential source of risk on the scale of the market’s 2018 volatility implosion.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 2/17/2023 

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