Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities finished a choppy week slightly lower.
    • S&P 500 -0.06% Dow -0.23%, Russell 2000 +0.59%, Nasdaq -0.42%1
      • The All-Country World Index declined -0.30%.1
    • S&P 500 sub-sectors were notably mixed last week.
      • Staples, Real Estate, Utilities, & Financials all rose over 1% to lead the way. 1
      • Energy led to the downside by a wide margin at -2.58%.1
    • The CBOE Volatility Index (VIX) declined for the 5th straight week to close below 17. 1
  • US Treasury bond yields moved higher last week.
    • US 2yr +0.09% at 4.17%, 10yr +0.05% to 3.57%, 30yr +0.04% to 3.78%.1
    • While red flags exist under the surface, bond volatility & spreads have come back to normal.
  • Commodities as an aggregate asset class moved lower last week.
    • WTI Crude sank -5.67%.1
    • Gold dropped -1.11%.1
    • The US Dollar index rose +0.16%.1
  • In our opinion, U.S. economic data was extremely mixed last week.
    • Existing home sales sank while new construction offered some hope. 1
    • Manufacturing reports conflicted with NY surging while Philly contracted for the 8th straight mo. 1
    • US unemployment claims increased yet the labor market stayed robust. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined -0.17%.1


  • US Equities ended a very tame week slightly lower.
    • The Nasdaq led to the downside, pressured by a big move lower by Tesla shares.
    • The small-cap tracking Russell 2000 was the only positive major index with a gain of +0.59%.1
  • While the S&P 500 is up 7% year-to-date, we note that “breadth” or participation of companies in this rise has collapsed to the lowest level since at least 2005. 1
    • Much of this year’s gain has concentrated in technology companies.
    • We believe much of this optimism came from expectations that the Federal Reserve would pivot from its most aggressive interest-rate hiking cycle in four decades – a major headwind for the tech sector last year.
      • This has pushed the S&P 500 Information Technology Index up 19% in 2023 compared with a 7.7% gain for the S&P 500 Index. 1
      • That’s info tech’s strongest start to a year relative to the S&P 500 since 2009. 1
      • Tech stocks in the S&P 500 are trading at almost 25 times prospective earnings and are close to being the most expensive ever relative to the broader market. 1
      • To justify such a multiple, the Fed would need to cut rates by at least 300 basis points, which is more than 5x what is currently priced into the markets. 1
  • S&P 500 subsectors were mixed last week.
    • Defensive areas of the market plus Financials led to the upside while Energy followed crude oil lower to lead to the downside.
    • There isn’t currently much signal from weekly sector performance.
  • US Treasury yields rose across the maturity curve last week.
    • On the positive side, volatility continued to leave the bond markets with trading in US Treasuries posting its smallest range since the collapse of Silicon Valley Bank. 1
    • However, underlying cross-currents are still present, leaving market participants on edge.
      • Economic data continues to force traders to dial up bets that the Fed will hike in both May & June, threatening to delay the much sought after pause. 1
      • The debt ceiling fight continues to cause angst among the investment community as we most likely head towards a fight that won’t be resolved until the US is on the verge of a default.
  • Signs continue to mount that credit is drying up in pockets of the economy at a worrisome rate.
    • Small businesses say it hasn’t been this difficult to borrow in a decade. 1
    • The amount of corporate debt trading at distressed levels has surged 300% over the last year. 1
    • Even before last month’s banking crisis, bankruptcies among private companies with at least $10m in assets had jumped to an average of 7.8/week. 1
    • Additionally, major banks revealed in their earnings reports substantial increases to their provisions for credit losses. (Morgan Stanley’s went up 400% and Citigroup’s doubled1)
  • Earnings season is upon us with most set to be announced over the next 2 weeks.
    • Earnings have been declining year-over-year since the 2nd quarter of ’22 and we anticipate that trend to continue. 1

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 4/21/2023 

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