Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities moved slightly higher last week as earnings season kicked off.
    • S&P 500 +0.80% Dow +1.2%, Russell 2000 +1.51%, Nasdaq +0.29%1
      • The All-Country World Index rose +1.24%.1
    • S&P 500 sub-sectors were mixed last week.
      • Financials & Industrials led to the upside with gains north of 2%.1
      • Real Estate & Utilities led to the downside with losses of around -1.3%.1
    • The CBOE Volatility Index (VIX) declined last week to end below 18. 1
  • US Treasury bond yields moved higher last week.
    • US 2yr +0.26% at 4.08%, 10yr +0.22% to 3.52%, 30yr +0.20% to 3.74%.1
    • Rising future inflation expectations helped push yields higher.
  • Commodities as an aggregate asset class moved higher last week led by oil.
    • WTI Crude gained 2.38%.1
    • Gold dropped -0.19%.1
    • The US Dollar index declined -0.51%.1
  • In our opinion, U.S. economic data was mixed last week.
    • Future inflation expectations rose in 2 data series released last week. 1
    • Retail sales fell more than expected in the March release. 1
    • Small business optimism fell below its 49-year average level. 1
  • An index of equities outside the US (FTSE All-World ex-US) rose +1.58%.1


  • US Equities rose slightly last week despite consumer prices easing in March and earnings season getting started off with large US banks beating expectations.
    • The Dow Jones Industrial Average & small-cap tracking Russell 2000 led to the upside with gains of 1.2% & 1.51% respectively. 1
    • A major headwind to equities last week was a rise in future inflation expectations from the New York Fed’s survey & from the latest Consumer Sentiment report. 1
      • The “higher for longer” consistent communication of the Federal Reserve seems to be entering the minds of investors here.
  • The S&P 500 is in its narrowest trading range since the first part of 2017. 1
    • Recently there were over 7 days in a row without a 1% move, the longest stretch since Nov ’22. 1
    • This lines up as earnings season get kicked off with expectations for S&P 500 cos to see a fall of 8% from a year ago. 1
      • This would be the biggest decline since the start of Covid.
      • The S&P 500 is currently trading at about 19x earnings, but its top 10 stocks are trading at an average of about 28x earnings. 1
    • The mega caps’ rich multiples mean it could be hard for them to deliver earnings that move materially higher.
      • As a result, first-quarter results might not do much to the index itself over the next few weeks.
  • S&P 500 subsectors were mostly positive last week.
    • Financials led to the upside as the largest US banks showed solid earnings reports that were helped by depositors flight to the biggest of the big during the banking chaos of last month.
    • Interest Rate sensitive sectors led to the downside on the move higher in US yields.
  • US Treasury yields rose across the maturity curve last week.
    • This followed two separate pieces of economic data pointing to inflation staying elevated for longer than was previously being priced into the markets.
      • This would cause the Fed to keep their interest rate policy higher for longer than market participants were anticipating.
    • Probabilities of rate cuts by the Fed in the 3rd quarter quickly moved lower while expectations of a rate hike at their May meeting moved close to 90%. 1
    • A reminder that Fed policy drives the short-term US Treasury market while investors’ future growth & inflation expectations drive the 10yr & 30yr maturities.
  • International equities have recently outperformed US benchmarks.
    • European equities just ended a 4 month streak of outperformance, the longest since 2023. 1
    • We believe this can be mostly attributed to the weakness in the US Dollar.
      • The USD has come crashing down from its multi-year highs in the 3rd quarter of 2022. 1
      • This has caused a rise in the “demise of the dollar” talk around the media/web which any quick data “fact check” would cause immediate dismissal.
    • We believe any number of recessionary events currently at risk of happening will drive global demand for the greenback (aka King Dollar) substantially higher.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 4/14/2023 

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