Capital Markets | 4 min read

    Market Commentary: Week of November 21, 2022

    Last Week

    Last week seemed to be centered around a rebuke to the markets by Fed speakers telling the world, yet again, that the idea of a quicker-than-expected pause is just not in the cards. One theme that has been resonating is, it may be fairly quick to get core from 6% to 4%, but the real work is getting 4% to 2%. If that is the case, monetary policy will have to be restrictive right through 2023 and into 2024.

    The 2-year Treasury note hit the reset button, rising 33 basis points while the 10-year ground a bit higher in yield. Corporate issuance, while heavy, was accepted well. Investment grade issues have pretty attractive yields, especially if the view is that the belly of the curve and the long end are close to peak yields.

    Munis had a great week along with corporates for much of the same reasons. While much of the media focus was aimed at every growing FTX-crypto fiasco, stocks and other risk assets seemed to pay little attention. Is crypto irrelevant to the broader market? We will have to see as the contagion in the crypto ecosystem rolls on.

    • The S&P 500 declined 0.7% for the week. The average daily move was 0.68%.
    • The NASDAQ fell 1.56% for the week. The average daily move for the week was 0.89%.
    • The 2-year Treasury yield jumped 21 basis points, closing at 4.54% on Friday. High year-over-year 4.72%, low yield .40%.
    • The 10-year Treasury yield rose 2 basis points for the week, closing at 3.83% on Friday. Year-over-year high yield 4.24%, low yield 1.345%.
    • The VIX Index rose 2.7% for the week, closing at 23.12 Friday. Year-over-year high 36.45 and low 16.29.
    • The MOVE Index increased 15% for the week, closing at 129.33 on Friday. Year-over-year high 160.72 and low 69.1.
    • 5-year Investment Grade Corporates (as measured by Markit CDX) spreads tightened 1 basis point for the week closing at 82 basis points Friday. High spread Year-over-year high of 111 and low of 49. 
    • High Yield corporate debt (as measured by Markit CDX) tightened 6 basis points, closing at 480 basis points on Friday. Year-over-year high 627, and low 288.
    • US Dollar Index declined 0.6% for the week closing at 106.93 on Friday. Year-over-year high 114.11 and low 94.79.
    • WTI Crude declined 9.1% using the January 2023 WTI Futures contract, closing at 80.11 Friday. Year-over-year high 123.70, and low 65.57.
    • Gold, as measured by the December futures contract, fell 0.8% for the week closing at 1,754 on Friday. High price for the front contract year-over-year 2,043 and low 1,633.
    • Bitcoin declined 0.7% closing at 16,637 on Friday. High price year-over-year 67,734 and low 15,731.

    The Week Ahead

    We come in this morning with stocks and Treasury yields both a bit lower. We have a short week ahead with the Thanksgiving holiday on Thursday. Monday or Tuesday morning should be the last day of any real liquidity, which could result in an outsized reaction to the ton of data we have coming Wednesday morning where we get Durable Goods, PMI, University of Michigan, New Home Sales, and then the November FOMC meeting minutes in the afternoon.

    Happy Thanksgiving!



    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 & 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

    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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