Market Insights | 5 min read

    Market Commentary: Week of May 23, 2022

    Last Week

    About the only thing good about last week in financial markets was that it ended on time on Friday. Equities and all credit spread off U.S. Treasuries had a nightmarish week. Major retailers like Walmart, Target, and Lowes all posted weaker than expected earnings, citing serious margin pressures. The days of passing 100% of the cost of inflation on to consumers are over.

    Each day seems to bring a new price shock accompanied by an exposé on some supply chain failure we never knew existed until it failed. I guess the only good news on that front is that we are getting a crash course on how the global economy really works.

    In rates, we had a rally in the long end of the Treasury yield curve, as the odds of a recession—potentially a deep one—are priced in. Chairman Powell and other Fed officials took to the airwaves to reiterate their stance that they are going to do whatever it takes to squash inflation and the financial markets are going to have to just deal with it. Even though Treasuries rallied, it felt a lot more like a flight to quality with duration perhaps a little safer with recession talk.

    Frustratingly for many, just as the last 60%-40% mutual fund was sold, the inverse relationship between bonds and equities finally returned. I doubt it will last given what we see on the inflation front and the Federal Reserve balance sheet reducing resolve.

    • S&P 500, fell 3.03% for the week. The average daily move was 1.41%.
    • The NASDAQ dropped 3.82% for the week. The average daily move for the week was 1.92%.
    • The 2-year Treasury yield, despite extreme levels of volatility, ended flat for the week, closing at 2.58%. High year-over-year 2.78%, low yield .10%.
    • The 10-year Treasury yield dropped 12 basis points for the week, closing at 2.92% Year-over-year high yield of 3.13%, low yield of .91%.
    • The VIX Index rose 2% for the week, closing at 29.43 Friday. Year-over-year high 36.45 and low 15.07.
    • The MOVE Index decreased 3.1% for the week, closing at 111.1 on Friday. Year-over-year high 140.03 and low 42.53.
    • 5-year Investment Grade Corporates (as measured by Markit CDX) spreads widened 6 basis points for the week closing at 91 basis points Friday, a new year-over-year high. High spread year-over-year high 91 and low of 46.56.
    • High yield corporate debt (as measured by Markit CDX) widened by 39 basis points, closing at 523 basis points on Friday, a new year-over-year high. Year-over-year high 523, and low 269.
    • U.S. Dollar Index fell 1.35% for the week closing at 103.15 on Friday. Year-over-year high 104.85 and low 89.44.
    • WTI Crude increased 1.5% for the week using the July WTI Futures contract, closing at 110.28 Friday. Year-over-year 123.70, and low 47.62.
    • Gold, as measured by the June 2022 futures contract rose 1.9% for the week closing at 1,842 on Friday. High price for the front contract year-over-year is 2,043 and low 1,678.
    • Bitcoin retreated by 2.16%, closing at 29,117 Friday. High price year-over-year 67,734 and low 28,402.

    The Week Ahead

    We come in this morning with equities better and bid and bond yields a bit higher. The elite embark on their annual conference in beautiful Davos this week to complain about the elite’s dislocation from the common man. Davos is always a hoot and there should be some choice monetary and fiscal policy comments. I expect the “whatever it takes” narrative to continue from central bankers.

    JPM chief Jamie Dimon is on the tape right now speaking on “Investor Day” and sounds relatively upbeat on credit conditions. I think he is painting too rosy of a picture but then again, he is Jamie Dimon, and I am not. Earnings week continues for equities and the economic data schedule is pretty full, culminating in the all-important PCE data for April on Friday.

    Join our investment experts as they discuss Fed policy, Municipal bond market performance, and 2022 predictions.


    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 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 & Tele-communications. 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.


    Investing involves certain risks, including possible loss of principal. You should understand and carefully consider a strategy’s objectives, risks, fees, expenses and other information before investing. The views expressed in this commentary are subject to change and are not intended to be a recommendation or investment advice. Such views do not take into account the individual financial circumstances or objectives of any investor that receives them. All indices are unmanaged and are not available for direct investment. Indices do not incur costs including the payment of transaction costs, fees and other expenses. This information should not be considered a solicitation or an offer to provide any service in any jurisdiction where it would be unlawful to do so under the laws of that jurisdiction. Past performance is no guarantee of future results.

    Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member FINRA & SIPC. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor, registered as such with the US Securities & Exchange Commission. SWBC Investment Services, LLC is under separate ownership from any other named entity. SWBC Investment Services, LLC a division of SWBC, is a nationwide partnership of advisor.

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    John Tuohy

    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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