.png)
CHART OF THE WEEK: S&P 500 vs. US 2s30s YIELD CURVE
US #stocks and the US yield curve are diverging meaningfully as the 2-year - 30-year Treasury Bond yield curve just inverted for the 1st time since late 2007 while the S&P 500 trades within 5% of its all-time-high.
WEEKLY SUMMARY: Worst quarter since early 2020 for the S&P 500
It was a mixed week for the major US equity indexes as the S&P 500 Index closed out its best month since December but its worst quarter since early 2020. Cyclicals stocks underperformed over the week, with financials and industrials sectors being among the losers. Stock prices fluctuated over the week in apparent response to the evolving situation in the war in Ukraine. After rising briefly on renewed Russia-Ukraine tensions, oil prices resumed their decline following the Biden administration’s announcement of an extended release from the nation’s Strategic Petroleum Reserve to combat inflationary pressures. On the macro front, most US reports came in roughly in line with consensus expectations. US job gains fell somewhat below expectations at 431k versus 490k, but the unemployment rate fell a bit more than expected, to 3.6%. U.S. Treasuries 10-year yield fell slightly, but the Bloomberg U.S. Aggregate Bond Index recorded its worst quarter since late 1980. Portions of the Treasury yield curve inverted over the week. European stocks gained in a choppy week of trading, as higher-than-expected inflation data boosted expectations for further interest rate increases and drove bond yields higher. Chinese markets advanced, as investors anticipated that Beijing would step in to support the country’s economy and markets.
Disclaimer
This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document.
Related Articles
Most of US equities indices rose to record highs, as investors wagered that a “red sweep” (Republicans winning Presidency, Senate and Congress) would result in faster earnings growth, looser regulations, and lower corporate taxes. The small-cap Russell 2000 Index surged 8.57% for the week but was the sole benchmark to remain out of record territory. Meanwhile, the Dow Jones hit 44.000 for the first time while the S&P 500 closed just shy of 6,000, up 4.7% for the week, its best weekly gain in almost a year. On Thursday, the Fed announced a 25bps rate cut, its first easing move since cutting rates by 50 basis points in mid-September. In terms of economic data, the October ISM services sector activity came in at 56.0, well above expectations and the best reading since August 2022. U.S. Treasuries generated positive returns heading into Friday, as yields largely ended lower than where they ended the previous week.