U.S. Equities Low Finish Amid Interest Rate Hikes And Geopolitical Uncertainty

Market Down and Dirty

Last Week’s Economic/Market Summary


  • U.S. equities ended last week decisively lower on mounting economic & geopolitical concerns.
    • S&P 500 -2.39% Dow -1.61% Russell 2000 -2.25%, Nasdaq -3.16%[1]
      • The All-Country World Index declined -2.50%.1
    • S&P 500 sub-sectors were mostly lower last week.
      • Energy & Staples were the lone positive sectors with gains less than a percent. 1
      • Real Estate & Consumer Discretionary led to the downside with losses over 4.5%.1
    • The CBOE Volatility Index (VIX) gained 11.59% last week to close above 21.5.
  • US Treasury bond yields moved higher last week.
    • US 2yr +0.03% at 5.07%, 10yr +0.30% to 4.93%, 30yr +0.31% to 5.09%.1
    • With longer maturities leading the move higher, the 2yr/10yr inversion is down to -0.14%.1
  • Commodities as an aggregate asset class were higher last week.
    • WTI Crude rose +0.98%.1
    • Gold gained +2.46%.1
    • The US Dollar index declined -0.47%.1
  • In our opinion, U.S. economic data continued to be mixed last week.
    • Retail sales came in much better than expected. 1
    • Initial jobless claims came in better than expected. 1
    • The Conference Board’s leading economic index fell for the 18th straight month. 1
  • An index of equities outside the US (FTSE All-World ex-US) sank -2.76%.1


  • US Equities finished the week lower across the board and skyrocketing interest rates and geopolitical uncertainty weigh on investors’ minds.
    • The Nasdaq led major indices lower as large component Tesla disappointed with their earnings release, sliding lower by over 15% last week. 1
    • The S&P 500 and small-cap tracking Russell 2000 both declined over 2%.1
    • Interesting to note that market breadth is improving…albeit to the downside.
      • In 50% of the trading sessions since earnings started 10 days ago, over 400 of the 500 components of the S&P 500 have moved in the same direction. 1
      • This didn’t happen a single time during the previous timeframes around the past 3 earnings periods.
  • S&P 500 subsectors were mostly negative last week.
    • Energy & Staples led to the upside.
      • As the Israel/Gaza war shows signs of spreading in the Middle East, traders have grown more concerned that in addition to the human tragedy, the supply of oil could be disrupted, further boosting prices.
    • Consumer Discretionary & Real Estate led sectors lower.
      • Tesla’s disappointing earnings weighed on discretionary while continued negative events relating to real estate companies hurt the sector.
  • US Treasury yields shot back higher after a brief reprieve the previous week.
    • The rate on the 10-year swung in a range of almost 0.40%1, buffeted by crosscurrents including resilient retail sales and jobless figures, a bevy of comments from Fed officials and rising demand for haven assets amid concerns of an escalating conflict in the Middle East.
      • The 10yr traded around the major psychological level of 5% most of last week as the 20yr and 30yr blew through that same level. 1
    • The ICE BofA MOVE Index, which tracks anticipated US Treasury volatility, has risen for five-straight weeks. 1
      • In fact, by one measure, swings in long-term rates are exceeding those for equities by the most in at least 18 years. 1
    • The difference between the 2yr and 10yr US Treasuries has shrunk to 0.14% after the inversion reached levels over 1% which had not been seen since 1980. 1
      • We reiterate that most of the past economic weakness surrounding the 2/10yr inversion has happened after the inversion steepens to normal levels.
  • Commodities were mixed last week as oil continued its recent run higher.
    • Gold gained nearly 3% last week and is up almost 8% in the past 14 days. 1
      • We caution that the price divergence from real interest rates is now at extreme levels after the recent reflexive rally.
    • Copped declined again last week as the slowdown in China as well as the rest of the world continues to weigh on the industrial metal.
  • All eyes will be on earnings this week as bellweather companies such as Microsoft, Google, Amazon, Meta, IBM, UPS, Coca-Cola, Visa, & Exxon Mobil all report.

Ryan A. Mumy, CFP®,

AIF® – Chief Investment Officer

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

 1 Source: Bloomberg – 10/20/2023 

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