Economic Market Summary: U.S. Equities Finished The Week Strong Across The Board

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities finished the week higher across the board.
    • S&P 500 +1.88% Dow +2.02% Russell 2000 +3.33%, Nasdaq +2.04%
      • The All-Country World Index declined +1.7%.
    • S&P 500 sub-sectors were all up last week.
      • Consumer Discretionary, Materials, & Real Estate led with gains over 3%.
      • Defensive Utilities & Staples were the worst performers gaining just under 1%.
    • The CBOE Volatility Index (VIX) dropped 7% to end the week @ 14.60.
  • US Treasury bond yields were lower last week across the yield curve.
    • US 2yr -0.04% at 4.50%, 10yr -0.11% to 3.69%, 30yr -0.08% to 3.88%.
    • Yields fell on renewed hope of the Fed pausing rate hikes.
  • Commodities as an aggregate asset class were flat last week.
    • WTI Crude declined 1.28%.
    • Gold was flat.
    • The US Dollar index gained +0.03%.
  • In our opinion, U.S. economic data continued to be mixed last week.
    • Non-farm payrolls surged last week, beating expectations by a wide margin.
    • Consumer confidence continued its recent trend lower.
    • Home prices are rising again despite rising mortgage rates & low supply.
  • An index of equities outside the US (FTSE All-World ex-US) rose +1.1% last week.


  • US Equities rose higher across the board last week as major indices continued to be powered higher by mega-cap tech companies.
    • The Nasdaq jumped 1.8% for it’s 6th straight weekly gain.
    • Small-caps, comprised mostly of energy cos & banks, shot higher by 3.3% as short-sellers were forced to cover.
      • Small-caps still lag large-cap growth benchmarks by the most in nearly 2 decades.
    • We continue to believe that unless gains spread out further beyond the largest tech companies, this rally has little chance of continuing.
      • However, if breadth does expand, some unbelievable opportunities for catch-up trades could be presenting themselves.
    • In May, the Russell 1000 Value Index fell 4% while the Growth counterpart rose about 4%.
      • This monthly outperformance is the biggest spread between the two since 2000.
        • So far in 2023, the 23% difference in favor of Growth is the largest in 44 years.
  • S&P 500 subsectors were higher across the board last week.
    • Outside of Tech & Consumer Discretionary, many year-to-date laggards caught some upside last week as short-sellers were forced to cover.
      • If this continues, this would present the evidence that breadth is spreading and these laggards could rocket higher, catching up to the megacap 2023 leaders.
      • We’re watching this dynamic very closely.
  • US Treasury yields were lower across the yield curve last week.
    • Dovish Fed speakers who mentioned favoring a pause next meeting helped drive the 2yr yield lower.
      • Traders are now expecting one more rate hike between the Fed’s June & July meetings.
    • Longer term bonds saw yields come lower as investors seemed to snatch up the higher yields in anticipation of an eventual Fed pivot to loosening that would drive yields lower.
  • Despite the Fed speakers dovishness, the latest US jobs data from last week presented conflicting signals for Jerome Powell’s Fed.
    • Hiring exceeded expectations while the unemployment rate rose.
    • Additionally, job openings unexpectedly surged in April to the highest in 3 months and the number of vacancies increased.
    • In our opinion, this puts the Fed in a tough spot as if they pause, inflation could come roaring back while if they over tighten, they risk “breaking something”.
  • The CBOE VIX index (fear gauge) dropped to its lowest level since January of 2020.
    • This is despite all the underlying economic weakness and large divergence in year-to-date performance of the various components of the equity markets.
    • So far this year, the Info Tech aspect of the S&P 500 has outperformed the entire 500 index by the widest margin on record.
      • With tech stocks up over 30%, non-tech stocks are basically flat so far this year.
    • We reiterate that healthy bull markets aren’t driven by so few components.
      • However, If these dramatic underperforming sectors start participating, there could be an opportunity for a large catch-up to the Tech area of the market.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400 or 

 1 Source: Bloomberg – 6/5/2023 

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