Weekly Recap

by Stefanos Bazinas- Execution Strategist
November 18, 2022 4:55 p.m. ET
DOW 33,746 (+199), S&P 500 3,965 (+19), Russell 2000 1,850 (+11), NYSE FANG+ 4,612 (-72), ICE Brent Crude $87.87/barrel (-$1.91), Gold $1,751/oz (-$12), Bitcoin ~16.6k (+35)

MAC Desk Commentary:

Following a lighter-than-expected CPI print, last week the S&P 500 posted its best week since June and a third weekly gain in four weeks (+4.7%, +4%, -3.4%, +5.9%) - as of last Friday’s close, the S&P 500 was up +11.4% since October 14th. US equity markets struggled to find decent footing on either side of unchanged this week, as indices were quick to reverse any intraday rallies and dips. The S&P 500 finished the week down -0.7%, the Russell 2k underperformed down -1.8% while the Dow was unchanged.

Following last week’s rally, US equity markets took a breather on Monday with selling pressures exacerbating late in the trading session as the S&P 500 ended down -0.9%. Tuesday’s lighter-than-expected PPI print added extra fuel to last week’s fire as S&P 500 futures traded as high as +2% following the print and ahead of Tuesday’s open. Markets proceeded to sell off intraday following reports of a missile landing in Poland but were quick to recoup losses as soon as fears of any escalation dissipated with reports that the missile did not originate in Russia. Wednesday was quiet in terms of economic data, as earnings-driven price action drove markets slightly lower. On Thursday morning, markets were shaken after comments by Fed Bullard who said current rates may not be sufficiently restrictive and may need to be raised between 5-7%. Investors were spooked by these comments and the S&P 500 proceeded to open down over -1%. Despite this pressure, markets proved resilient and reversed those losses during the last two trading sessions as the S&P 500 closed the week almost exactly at Wednesday’s pre-Bullard close.

Arguably the most notable moves this week have been in rates and commodities. During the course of this week, the 2yr yield jumped almost 20bps as the 30yr yield fell by ~13bps and the 10yr yield was mostly unchanged. This has brought the current 2-10 spread at 70bps - the highest level in 40 years for the market’s favorite recession precursor indicator. On the commodities front, oil prices logged their worst weekly performance since March 2020. ICE Brent shed over -8.5% since last Friday as it traded back below $88. Precious metals were also weak - gold (-1%), silver (-3.3%) and copper (-7.1%) all posted sizeable losses as well. Healthcare, staples and utilities were the only S&P 500 sectors ending the week in positive territory, while consumer discretionary and energy were this week’s laggards. Value outperformed growth by over 120bps this week (IVE unch, IVW -1.3%), despite the megacap tech basket outperforming the broader market (NYSE FANG+ -0.3%). The US Dollar index showed some late-week strength to recoup early losses, ending the week up 0.7 to 106.89.

What’s on Tap Next Week

Looking ahead to shortened week ahead, Wednesday’s flash PMIs and Fed minutes will dominate an otherwise quiet in terms of economic data Thanksgiving week.

Index Today WTD YTD
S&P 500 0.5% -0.7% -16.8%
Dow 0.6% 0.0% -7.1%
Russell 2K 0.6% -1.8% -17.6%
NYSE FANG+ -1.5% -0.3% -37.9%
Sectors Today WTD YTD
S&P 500 / Consumer Staples -SEC 1.0% 1.7% -3.2%
S&P 500 / Health Care -SEC 1.2% 1.0% -4.8%
S&P 500 / Utilities -SEC 2.0% 0.8% -4.3%
S&P 500 / Communication Services -SEC -0.4% -0.1% -37.8%
S&P 500 / Industrials -SEC 0.7% -0.2% -6.3%
S&P 500 / Information Technology -SEC 0.1% -0.9% -24.5%
S&P 500 / Financials -SEC 0.8% -1.5% -9.7%
S&P 500 / Materials -SEC 0.6% -1.6% -11.8%
S&P 500 / Real Estate - SEC 1.3% -1.8% -26.6%
S&P 500 / Energy -SEC -0.9% -2.4% 65.4%
S&P 500 / Consumer Discretionary -SEC 0.0% -3.1% -32.0%
AVERAGE 0.6% -0.7% -8.7%

Other Asset Classes:
  • Government Yields -
    • US - 2yr +8bps to 4.531%, 5yr +7bps to 4.007%, 10yr +5bps to 3.825%, 30yr +3bps to 3.923%.
  • USD index: +$0.29 to $106.89
  • Oil prices - ICE Brent: -2.13% to $87.87, WTI: -1.91% to $80.08
  • Gold: -0.66% to $1,751.40, Silver: -0.12% to $20.95, Copper: -1.44% to $3.64
  • VIX: -0.81 to 23.12
  • Bitcoin: +0.2% to ~16.6k
Central Banks/inflation/currencies:
  • ECB officials hint at slower pace of rate hikes, predictable debt run-off. - Reuters
  • Eurozone banks set to kick off largest loan repayment in euro’s history to the ECB next week. - Reuters
  • Japan CPI surprises to the upside, hitting 40-year highs as officials still expect tame inflation next year. - Bloomberg
  • One in four Americans at risk of power grid blackout this winter. - Bloomberg
Other News:
  • US mortgage rates log largest drop in over 30 years, dropping to 6.61%. - Bloomberg
Economic Data:
  • US
    • Existing Home Sales: 4.430M vs. 4.360M cons., prior 4.710M
  • Global:
    • Japan CPI: 3.7% y.y vs. 3.5% cons., prior 3.0%
    • Japan CPI Ex-Perishables: 3.6% y.y vs.3.5% cons., prior 3.0%
    • UK Retail Sales: -6.1% vs. -6.5% cons., prior -6.8%
  • Monday -
    • Earnings Pre-Market: J
    • Economic data:
      • US: None
      • Global: Germany PPI
    • Central Banks
      • None
  • Auctions: $42B 2yr, $43B 5yr
    • Earnings Post-Market: DELL, MMS, URBN, ZM
  • Tuesday -
    • Earnings Pre-Market: ADI, AMWD, ANF, BBY, BURL, CAL, CHS, DKS, DLTR, JACK, ROAD, WMG
    • Economic data:
      • US - None
      • Global: EU Consumer Confidence
    • Central Banks
      • Fed Speakers: Mester
    • Auctions: $35B 7yr
    • Energy - API Inventory
    • Earnings Post-Market: ADSK, AEO, HPQ, JWN, VMW
  • Wednesday -
    • Earnings  Pre-Market: DE
    • Economic data:
      • US - Mortgage apps, claims, US durable/capital goods orders, Flash PMIs, New home sales, Final U of Mich. Sentiment
      • Global: Taiwan Industrial Production, Eurozone Flash PMIs
    • Central Banks
      • Fed Minutes
      • Rate Decision: New Zealand
    • Energy -  Oil/Natural Gas Inventories, Rig Count
    • Earnings Post-Market: None
  • Thursday - US Markets Closed for Thanksgiving
    • Economic data:
      • Global: South Korea PPI,
    • Central Banks
      • Rate Decisions: South Korea, Riksbank
      • ECB Minutes
  • Friday - Trading Ends 1:00
    • Economic data:
      • US - None
      • Global: Tokyo CPI
    • Central Banks
      • None
    • Emergency EU Energy Minister Meeting

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