Equities Decline In A Shortened Week

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities declined last week for the 4th time in 6 weeks.
    • S&P 500 -1.26% Dow -0.75% Russell 2000 -3.63%, Nasdaq -1.93%[1]
      • The All-Country World Index was lower by -1.39%.1
    • S&P 500 sub-sectors were mostly lower last week.
      • Utilities & Energy were the lone positive sectors.
      • Industrials & Materials led to the downside with losses over 2%.1
    • The CBOE Volatility Index (VIX) gained around 5% to end the week around 14. 1
  • US Treasury bond yields rose last week.
    • US 2yr +0.11% at 4.98%, 10yr +0.08% to 4.26%, 30yr +0.04% to 4.33%.1
    • The 2yr yield continues to stay around levels not seen in 15+ years.
  • Commodities as an aggregate asset class were mixed last week.
    • WTI Crude gained +1.93%.1
    • Gold was declined -1.21%.1
    • The US Dollar index gained +0.78%.1
  • In our opinion, U.S. economic data continued to be mixed last week.
    • Factory orders declined 2.1% over the month but was ahead of expectations to be worse. 1
    • Mortgage applications declined 2.9% as higher interest rates continue to hurt new mortgages. 1
    • Jobless claims and ISM Services data both surprised to the positive in their latest data. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined -1.86%.1


  • U.S. Equities declined in the holiday shortened week.
    • The small-cap Russell 2000 led to the downside with a loss of 3.63%.1
    • The Dow Jones Industrial Average was the best performer as a loss of -0.75%.1
    • While stocks have wobbled of late, dropping in 4 of the last 6 weeks, the decline is only about 3% thus far in the broad S&P 500. 1
    • Despite the weakness, 94 trading sessions have come and gone since late April without a single loss of at least 1.5% in the S&P 500. 1
      • This reiterates the fact overall volatility remains fairly subdued.
      • This is the longest such streak since 2018.1
  • On the volatility front, the VIX gained last week but still closed at only 14.
    • The cost to protect against a resurgence in volatility is close to the cheapest it’s been since before the Covid-fueled selloff in March of 2020. 1
  • S&P 500 subsectors were mostly lower last week.
    • Energy led to the upside on continued strength from crude oil prices.
      • Energy has led all other sectors for over a month with a gain of over 5%.1
    • Materials & Industrials led to the downside with Tech down just a touch under 2%.1
    • Coming off its best week since June, Tech slumped as Apple and Nvidia both notched their 2nd worst declines of the year. 1
      • The tech-heavy Nasdaq 100’s equities trade at 27 times annual earnings, 35% above the S&P 500 — whose own valuation is inflated by the same tech mega caps. 1
      • Versus sales, the Nasdaq fetches a multiple of nearly five, almost twice as expensive as the broader market. 1
  • US Treasury yields were higher last week, led by the short-end’s 2-year maturity.
    • The yield curve flattened as the 2yr rose more than the 10/30yr maturities.
    • While traders are anticipating the Federal Reserve to not hike at their meeting next week, they are anticipating another rate hike before the end of the year. 1
    • The monthly Consumer Price Index on Wednesday will provide the latest insight into how much more the Fed might need to go to pull inflation down to its 2% target.
  • Non-US equities were negative last week seemingly dragged down by the continued strength in the US Dollar & negative Chinese economic data.
    • Not long ago, the market was betting that the US would end up in recession while Europe would be able to escape it…now it’s the other way around which has helped push the US Dollar higher.
  • From High-yield credit to equities, the odds of a US economic downturn priced into financial assets have fallen to the lowest since April of 2022. 1
    • With the US economy humming along at a clip of 2%, even Fed staff have written out a recession from their forecasts for this year. 1
    • One way of thinking about just how sensitive the market is to fresh economic data is the link between the S&P 500 and Citigroup Inc.’s widely followed surprise index for the US economy.
      • This 40-day correlation has tumbled to the lowest on record. 1

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

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

 1 Source: Bloomberg – 9/8/2023 

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