Equities Continue Upward Trend

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities moved higher as economic data surprised investors to the upside.
    • S&P 500 +2.31% Dow +1.94% Russell 2000 +5.43%, Nasdaq +2.37%[1]
      • The All-Country World Index rose +2.92%.1
    • S&P 500 sub-sectors all moved higher last week.
      • Real Estate, Utilities, & Materials led to the upside. 1
      • Consumer Staples was the worst performer but still gained +0.77%.1
    • The CBOE Volatility Index (VIX) declined 2% to close below 14 at 13.80. 1
  • US Treasury bond yields were lower last week.
    • US 2yr -0.16% at 4.88%, 10yr -0.17% to 4.44%, 30yr -0.14% to 4.59%.1
    • The market is now firmly pricing the Federal Reserve being done with rate hikes.
  • Commodities as an aggregate asset class were mixed last week.
    • WTI Crude lost -1.72%.1
    • Gold rose -2.08%.1
    • The US Dollar index declined -1.93%.1
  • In our opinion, U.S. economic data continued to be mixed last week.
    • The most tracked inflation measure (CPI) came in slightly lower than expected. 1
    • Retail sales surprised with more strength than consensus expectations. 1
    • Initial and continuing unemployment figures rose. 1
  • An index of equities outside the US (FTSE All-World ex-US) gained +3.48%.1


  • Domestic equities moved higher last week on the back of economic data that showed weakening yet not to the extent expected.
    • Small-caps led the charge higher last week in a clear change of character for the markets.
      • With a weekly gain of 5.43%, the Russell 2000 outpaced both the S&P 500, Nasdaq, & Equal-weight S&P. 1
    • Also interesting to note is Equal-Weight S&P 500 outperformed the traditional market-cap weighted S&P by over a percent last week. 1
    • The market is now firmly pricing in a soft-landing for the economy and asset prices have started to reprice to this dynamic.
      • If this change in trend continues, we believe equal-weight & small-caps have the opportunity to dramatically outperform in the coming months.
  • S&P 500 subsectors were all higher last week.
    • Year-to-date lagging sectors outperformed last week as the worst performing sector (Staples) was the only one not to rise by over 1%.1
    • This is happening as valuations of high-quality stocks — those with high profitability and low leverage — have become significantly more expensive compared to both the overall market and their low-quality counterparts.
      • The other times when quality commanded such a high valuation premium was in 2020 during Covid and 2008/2009 during the financial crisis. 1
  • The US Treasury bond market saw yields drop across the maturity curve last week.
    • Softer-than-expected inflation induced bonds to rally over a percent last week. 1
    • Spurred by slowing inflation and signs of cooling economic growth, traders and investors have recently rushed headlong into US government debt, convinced that the Federal Reserve is done raising interest rates and will shift to cutting them by the middle of next year.
      • While economic data has weakened, it has not been to the degree often seen past recessionary times.
    • While massive screams for a soft landing have been the case in every previous economic downturn and at the same time past similar economic scenarios have resulted in 2 such soft landings, until the data decidedly turns, we urge caution in calling “all clear”.
  • As earnings season draws to a close, so does the S&P 500’s profit recession.
    • Earnings are up 4% year-over-year with over 90% of S&P 500 firms having reported results for the third quarter, meaning a three-quarter streak of earnings decline is likely done. 1
    • Traders are gearing up for a few more earnings from retailers and tech companies next week Best Buy Co., Nordstrom Inc. and Lowe’s Cos. are set to post slumping sales, while Nvidia Corp.’s quarterly results could still exceed sky-high investor expectations thanks to strong demand for generative artificial intelligence.
    • Forward analyst earnings estimates have come down yet still show expectations for a large pick-up in corporate profits over the next 2 years.
    • We will continue to monitor both the economic data as well as price/trend/momentum to make prudent decisions on deploying capital.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

Contact: 828/855-9400
info@CIASonline.com or rmumy@bloomberg.net 

 1 Source: Bloomberg – 11/17/2023 

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