Mixed Finish For The Week, Equities Tilt Slightly Down

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities ended the week mixed with a negative tilt.
    • S&P 500 -0.68% Dow -1.34% Russell 2000 +0.04%, Nasdaq +0.06%[1]
      • The All-Country World Index dropped -1.01%.1
    • S&P 500 sub-sectors were mostly negative last week.
      • Energy led to the upside by a wide margin at +1.21%.1
      • Utilities & Staples led to the downside.
    • The CBOE Volatility Index (VIX) ended the week higher by 2% at 17.53. 1
  • US Treasury bond yields were mixed last week.
    • US 2yr -0.07% at 5.03%, 10yr +0.15% to 4.59%, 30yr +0.20% to 4.73%.1
    • The significant steepening of the yield-curve dropped the 2/10yr inversion to 0.46%.1
  • Commodities as an aggregate asset class were little changed last week.
    • WTI Crude rose +0.78%.1
    • Gold was plunged -3.98%.1
    • The US Dollar index gained +0.54%.1
  • In our opinion, U.S. economic data continued to be mixed last week.
    • Initial jobless claims came in better than expected while continuing claims rose. 1
    • Measures of economic activity, consumer confidence & manufacturing came in below estimates.
    • The housing market continues to show cracks with weakening data. 1
  • An index of equities outside the US (FTSE All-World ex-US) declined -1.46%.1


  • US Equities continued to struggled this week as the US Dollar & Treasury yields continued higher.
    • The S&P 500 declined -0.68% and the Dow lost -1.34%1 as economic tailwinds supporting a potential economic “soft-landing” continued their turn into headwinds.
      • The tech-heavy Nasdaq & small-cap tracking Russell 2000 finished slightly positive. 1
      • We view this more as a reflection of positioning changing than any signal of strength.
    • Washington politicians took a step towards not contributing to economic weakness by kicking the can down the road with a bill over the weekend to keep the US gov’t funded for 45 days. 1
  • S&P 500 subsectors were mostly negative last week with Energy leading to the upside.
    • The S&P 500 Consumer Discretionary Sector Index has fallen 7.6% over the past two weeks, with the declines led by CarMax, Carnival Corp. and Amazon.com Inc. 1
      • Meanwhile, personal consumption, the main driver of the US economy, rose at the slowest monthly pace since late 2020 in August and US consumer confidence dropped to a four-month low in September. 1
    • Considering the above, defensive areas of the economy have been surprisingly weak the last month as the few year to date high-flying sectors have sold off.
  • The VIX volatility index rose once again this week but is still far from indicating any big concerns by investors at large.
    • The volatility curve out in times shows that investors remain fairly complacent as compared to March of this year.
    • Additionally, there hasn’t been a surge in option volatility or a mad dash for portfolio hedges1 common in equity market bottoms.
  • US Treasury yields were mixed last week as the 2yr declined while the 10yr & 30yr had big moves higher.
    • The steepening of the yield curve from deep inversion continued.
      • We’ve noted in past writings that historically, most of the economic & stock market weakness comes upon this steepening…not at the deepest inversion levels.
    • Angst in the bond market saw yields on the benchmark 10-year US Treasury hit the highest levels since 2007 last week while the 30 year peaked near 2010 levels. 1
    • The same underlying phenomenon that is causing value to structurally underperform until it suddenly outperforms violently appears to be behind the unprecedented move in bond yields as supply drives a repricing rather than demand.
      • We believe that when investors discover that high cash yields are not going to persist forever…and that the likely cause of the Fed’s reversal from raising rates to cutting them is a notable deterioration in economic conditions, the scramble for bonds should be epic.
  • Financial conditions in the US have risen to levels not seen since November of 2022. 1
      • The Federal Reserve’s restrictive monetary policy is tightening financial conditions by design.
      • The two-month damage to stocks thanks to even higher longer-term bond yields — while the US dollar soars — has pushed a Goldman Sachs Group Inc. index of cross-asset health to the most sluggish level of the year.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

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

 1 Source: Bloomberg – 9/29/2023 

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