Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities had their most volatile week of the year as various risks roared to the forefront.
    • S&P 500 -4.52% Dow -4.44%, Russell 2000 -8.00%, Nasdaq -4.71%1
      • The All-Country World Index sank -3.75%.1
    • S&P 500 sub-sectors were all much lower last week.
      • Consumer Staples was the best performer with a decline of only -1.97%.1
      • Financials led to the downside with a loss of -8.5%.1
    • The CBOE Volatility Index (VIX) skyrocketed 33.8% to end the week at 24.74. 1
  • US Treasury bond yields all declined substantially in true risk-off trading.
    • US 2yr -0.26% at 4.60%, 10yr -0.27% to 3.70%, 30yr -0.20% to 3.70%.1
    • The banking turmoil last week caused rapid repricing of the Fed’s path forward.
  • Commodities as an aggregate asset class moved higher last week.
    • WTI Crude declined -3.89%.1
    • Gold rose 0.54%.1
    • The US Dollar index rose +0.11%.1
  • In our opinion, U.S. economic data was mixed last week.
    • Payroll data showed the first hint of a softening labor market. 1
      • Wage gains were slowed and the unemployment rate ticked higher. 1
    • US factory orders declined in the latest reading. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined -1.93%.1


  • US Equities hit a buzzsaw last week as markets erased any 2023 gains in quick order.
    • Equities were hit hard last week with the S&P 500 falling over 4.5% & the financials heavy small-cap Russell 2000 led to the downside with a decline of 8%.1
    • Before the select bank issues, the market had digested a stiffening resolve against inflation by the Federal Reserve & heightened risks of recession.
  • Last week’s events dented the main plank of the bull case for stocks that higher interest rates weren’t really hurting anyone.
    • Well…banks have emerged as an exception as higher interest rates saddle lenders with paper losses on their bond portfolios and lure depositors away.
      • If too many leave…the paper losses can quickly turn into realized ones.
    • The Fed has stepped in to provide relief to this scenario that seems to have put most of the banking sector contagion concerns to bed.
    • In our opinion, this was a 1920’s/30’s style “run” on a bank vs a failure like 2008/09.
      • We believe Silicon Valley Bank was wildly mismanaged on many fronts leading to them being taken over by the FDIC on Friday.
    • For investors, the question becomes whether anxiety over the banking system is enough to fuel another major down-leg in a bear market that began 14 months ago?
      • Skittish traders are aware that the financial crisis crash of 2008 didn’t see its worst stretch until about a year into the selloff, when the Lehman Brothers failure sent the S&P 500 down 30% starting in September of that year.
  • US equity sectors all traded substantially lower last week led lower by Financials. 1
  • US Treasury yields fell off a cliff last week across the maturity curve.
    • Yields saw their biggest 2-day plunge since the financial crisis. 1
      • Rate traumas like that have a habit of forcing speculative money into evasive action.
    • Past swings in Treasuries on the scale of last Thursday & Friday hold potentially worrisome signals for the investing landscape & the US economy.
    • In 50 years of data, 2yr US Treasury yields have posted a two-day decline of 0.45% 79 times. 1
      • With 2 exceptions, all other episodes were during or within 6 months of a US recession. 1
  • The turmoil of last week also caused a rapid repricing in the markets for where the Federal Reserve will take interest rate policy next.
    • Expectations were about locked in by the futures market for a 0.50% hike at their next meeting.
    • Traders now see only a 63% chance of any rate increase at their meeting next week. 1
      • This much uncertainty on forward Fed expectations creates a large amount of volatility in the markets.
  • After equity markets got pounded on Friday, there’s still more room for further damage as a result of CPI & PPI releases this week.
    • Structurally the market remains in negative gamma territory which makes equity indices more vulnerable to wide swings in general. 1
  • We remain extremely defensively tilted, awaiting data to point the way on the next move for our clients.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 3/10/2023 

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