Last Week Artificial Intelligence (AI) mania hit the Street last week driving the tech-heavy NASDAQ up over 2.5%. The rally was led by NVIDIA, the leading maker of chips needed for artificial intellig...
Market Commentary: Week of April 24, 2023
Written by John Tuohy
April 24, 2023
It was a relatively quiet week for a change, as equities were stable and Treasury rates stayed in a range, albeit a pretty large one! Earnings reports have been mixed, with some big tech firms reporting slightly worse than expected numbers, taking the tech-heavy NASDAQ down some after a strong rally this month. Corporate debt issuance, led by major banks, was heavy but well absorbed. Overall, the robust supply pushed rates a bit higher, but spreads were mostly stable.
Economic reports continued to paint a picture of a weakening in manufacturing and housing but showed continued strength and inflationary pressures in services. All in all, it was a boring week, and it was much appreciated!
- The S&P 500 was nearly unchanged for the week. The average daily move was 0.22%.
- The NASDAQ declined 0.42% for the week. The average daily move for the week was 0.25%.
- The 2-year Treasury yield increased 8 basis points, closing at 4.18% on Friday. High year-over-year 5.07%, low yield 2.48%.
- The 10-year Treasury yield rose 5 basis points for the week, closing at 3.57% on Friday. Year-over-year high yield 4.24%, low yield 2.58%.
- The VIX Index dropped 1.76% for the week, closing at 16.77 on Friday. On Wednesday, the index set a new year-over-year low of 16.46. Year-over-year high 34.45 and low 16.46.
- The MOVE Index rose 1.69% for the week, closing at 118.84 on Friday. Year-over-year high 198.71 and low 97.33.
- 5-year Investment Grade Corporates (as measured by Markit CDX) spreads widened 2 basis points for the week closing at 76 basis points Friday. High spread Year-over-year high of 111 and low of 67.
- High Yield corporate debt (as measured by Markit CDX) spreads increased 8 basis points, closing at 467 basis points on Friday. Year-over-year high 627, and low 408.
- U.S. Dollar Index rose 0.27% at 101.82 on Friday. Year-over-year high 114.11 and low 101.01.
- WTI Crude advanced 5.53% for the week, using the June WTI Futures contract, closing at 77.87 Friday. Year-over-year high 122.11, and low 66.74.
- Gold, as measured by the June futures contract, rose declined 1.19% for the week closing at 1,990 on Friday. The high price for the front contract year-over-year is 2,046 and the low is 1,623.
- Bitcoin fell 11.73% for the week closing at 27,272 on Friday. High price year-over-year 46,312 and low 15,632.
The Week Ahead
We come in this week with Treasury rates up small and equities flat. With the Federal Reserve’s FOMC meeting next week, our Fed bank presidents and governors are in their quiet period. Before they left us, multiple Fed officials kept a consistent message of an additional funds rate hike at the May meeting with no cuts on the horizon for 2023 as they remain data dependent.
Meanwhile, Earnings Week rolls on with the most important economic data—Personal Spending and PCE Deflator—coming in on Friday.
An index is unmanaged and not available for direct investment. Definitions sourced from Bloomberg. The Bloomberg Barclays Global Aggregate Negative Yielding Debt Market Value Index represents the portion of the Bloomberg Barclays Global Aggregate Index that measures the aggregate value of global debt with a negative yield. • The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. • The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market, and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.• The Cboe Volatility Index® (VIX) is a calculation designed to produce a measure of the constant, 30-day expected volatility of the US stock market, derived from real-time, mid-quote prices of weekly S&P 500® Index (SPX) call and put options with a range of 23 to 37 days to expiration.• The ICE BofA MOVE Index is a yield curve-weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of implied volatilities on the CT2 (Current 2 Year Government Note), CT5 (Current 5 Year Government Note), CT10 (Current 10 Year Government Note), and CT30 (Current 30 Year Government Note), with weights 0.2/0.2/0.4/0.2 respectively.• The Markit CDX North America Investment Grade Index is composed of 125 equally weighted credit default swaps on investment grade entities, distributed among 6 sub-indices: High Volatility, Consumer, Energy, Financial, Industrial, and Technology, Media & Telecommunications. Markit CDX indices roll every 6 months in March & September. • The Markit CDX North America High Yield Index is composed of 100 non-investment grade entities, distributed among 2 sub-indices: B, BB. All entities are domiciled in North America. Markit CDX indices roll every 6 months in March & September. • The U.S. Dollar Index (USDX) indicates the general international value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. Intercontinental Exchange (ICE) US computes this by using the rates supplied by some 500 banks.
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John Tuohy is CEO of SWBC Investment Services, LLC, a Broker/Dealer and SWBC Investment Company, an SEC Registered Investment Advisor (RIA). In his role, John is responsible for identifying, developing, and executing the division's strategic plan and all business development, sales, and marketing activities.
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