Economic Market Summary

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities finished the week lower in volatile trading.
    • S&P 500 -0.79% Dow -1.24% Russell 2000 -0.43%, Nasdaq +0.09%1
      • The All-Country World Index gained -0.39%.1
    • S&P 500 sub-sectors were mostly lower last week.
      • Tech, Utilities, Healthcare squeaked out slight gains. 1
      • Energy & Financials led to the downside with losses of -5.76% & -2.53%.1
    • The CBOE Volatility Index (VIX) gained 9% to end at 17.19. 1
  • US Treasury bond yields were mixed last week as the yield curve steepened.
    • US 2yr -0.12% at 3.92%, 10yr flat to 3.44%, 30yr +0.09% to 3.76%.1
    • Volatility in the bond market has come back to the highest level in a month. 1
  • Commodities as an aggregate asset class moved lower last week.
    • WTI Crude declined -7.16%.1
    • Gold rose +1.3%.1
    • The US Dollar index lost -0.37%.1
  • In our opinion, U.S. economic data continued to be mixed last week.
    • The Fed hiked interest rates 0.25% as expected. 1
    • The labor market stayed red-hot with unemployment dropping to 3.4%.1
    • Consumer spending remained strong with the latest data. 1
  • An index of equities outside the US (FTSE All-World ex-US) gained 0.45% last week. 1


  • US Equities finished the week slightly negative thanks to a Friday surge that helped offset steep losses to the major benchmarks earlier in the week.
    • Concerns about regional bank stress, a tightening Federal Reserve, & a red-hot labor market keeping the Fed hawkish seemed to be offset by some positive reactions to company earnings.
    • Additionally, the companies being bet against the most skyrocketed on Friday, helping to boost the overall indices.
    • The Nasdaq led the way as the only positive sector thanks to continued flight to mega-cap tech companies in the midst of all the economic uncertainty.
  • S&P 500 subsectors were mostly lower last week.
    • Technology (+0.27), Utilities (+0.07%), & Healthcare (+0.04%) were the only winners. 1
    • Energy followed the sell-off in crude oil & Financials came under stress once again.
      • Financials came under pressure once again after First Republic Bank was taken over by JP Morgan.
  • US Treasury yields were mixed on the yield curve last week.
    • The short-end moved lower while the long end saw yields rise.
      • The Treasury market is pricing in some significant cuts to interest rates by the Fed and participants later in this year. 1
      • If these cuts do not come to fruition, we believe the “belly” of the curve in the 2yr – 6yr maturities could come under significant pressure.
    • The bond market volatility tracking MOVE index rose back to its highest levels in a month as the yield on the two-year Treasury note swung 0.50% from its peak Tuesday to a low Thursday. 1
      • We reiterate that the bond market is sending an economic warning signal that the equity markets are not.
      • Over the coming weeks & months, this divergence will work itself out…until then, we remain cautious.
  • The Federal Reserve hiked interest rates 0.25% as expected this week and signaled they may pause. 1
    • Red hot labor data the next day seemed to raise questions surrounding the Fed’s ability to pause.
    • In our opinion, US inflation data this week will provide more clues about whether the Fed can pause or much continue tightening in order to stomp out inflationary pressures.
  • Corporate earnings season is coming to an end and the major takeaway is they by and large have been better than expected.
    • Coming into earnings, expectations were for a decline of 6.7% yet thus far, they’re only down 2% year-over-year. 1
    • While estimates continued to get moved lower, this has provided some hope to investors that maybe this time is different.
      • Much of the difference comes from the labor market where employees have been in short supply as compared to previous economic slowdown cycles.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 5/5/2023 

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