Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities posted their worst week since December as investors digested new data.
    • S&P 500 -2.67% Dow -2.99%, Russell 2000 -2.91%, Nasdaq -3.33%1
      • The All-Country World Index declined -2.83%.1
    • S&P 500 sub-sectors were almost all lower last week.
      • Energy was the lone gainer at +0.20%.1
      • Consumer Discretionary led sectors lower at -4.46% followed by Real Estate at -3.74%.1
    • The CBOE Volatility Index (VIX) rose 8% and closed at 21.95.1
  • US Treasury bond yields once again moved higher across the curve last week.
    • US 2yr +0.18% at 4.78%, 10yr +0.13% to 3.13%, 30yr +0.05% to 3.93%.1
    • The yield curve inverted further as the 2yr yield hit the highest level since 2007. 1
  • Commodities as an aggregate asset class were lower last week.
    • WTI Crude was flat on the week. 1
    • Gold declined -1.66%.1
    • The US Dollar index rose +1.35%.1
  • In our opinion, U.S. economic data was mixed last week.
    • The Fed’s preferred inflation gauge (Core PCE) rose 0.6% to its highest level since June ’22. 1
    • US personal income & spending gained more than expected in January, raising inflation fears. 1
    • Jobless claims continued to fall despite more layoff announcements. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined by -2.93%.1


  • US Equities rolled over last week as inflation readings rose leading many to anticipate higher Federal Reserve benchmark rates for longer.
    • In the interest rate swaps market, traders are now pricing in 3 additional 0.25% Fed hikes that would push their peak rate to 5.25%-5.5%.1
    • The alarming inflation figures weren’t the only trigger for the equity sell-off last week as dire forecasts from bellwethers Walmart & Home Depot soured investors moods.
    • All major equity indices declined at least 2.67% with the Nasdaq leading to the downside with a loss of 3.33%. 1
  • US equity sectors saw broad based selling last week.
    • Energy was the only positive spot last week with a slight gain.
      • Oil investors are confronting mixed signals as rising stockpiles counteract the rebound in demand assumptions. 1
    • Consumer Discretionary led to the downside with a loss of 4.5% as major retailers’ poor outlooks hurt the sector as whole. 1
    • Real Estate came in at the 2nd worst performer last week as the interest rate environment continues to weigh on this area of the market.
  • US Treasury yields continued their recent run higher as all issues on the maturity curve went up.
    • The 2yr rose 0.05% more than the 10yr thereby increasing the inversion even further. 1
    • A surge in job growth, rising consumer spending and faster-than-expected inflation have sent bond prices sliding again.
    • The drop has wiped out the strong gains from January, when markets were still betting that the Fed was nearly done tightening monetary policy and would be cutting rates by year’s end.
    • On the corporate bond front, the next 3 months have over $750 billion in maturities set to have to be repriced in the market or paid off. 1
      • Interesting to note that through January, US large company bankruptcies have hit their highest level since 2010. 1
  • Currently, household exposure to equities is in the 92nd percentile of history dating back to 1945. 1
    • With the option of being “paid to wait” on the table at the highest levels since pre-financial crisis, we could see this number move lower over the coming months.
  • 94% of S&P 500 companies have reported 4th quarter earnings so far.
    • 68% have reported positive earnings while 66% have beaten revenue expectations. 1
    • The blended earnings decline for the S&P 500 is at -4.8%.1
    • It is pretty clear earnings have rolled over for the quarter relative to last quarter & last year.
      • The question becomes is will they continue lower OR is this the low point in earnings and the economy will move higher from here.
    • The equity markets have been pricing in the latter while the bond market is pricing in more pain ahead for earnings.
      • We will continue to let the data point the way and remain patient in this environment of extremely mixed signals.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 2/24/2023 

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