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September 19th-23rd: Weekly Recap

September 19th-23rd: Weekly Recap

September 27, 2022

Another Down Week for Stocks

Equities Approach June Lows 

The rout in U.S. stocks deepened last week with the benchmark S&P 500 posting its fifth weekly loss in six weeks and briefly breached its June closing low on Friday. The S&P 500 was down by more than 4% for the third week over the same period, while the Nasdaq Composite was off by more than 5% for a second-straight week. The Federal Reserve raised interest rates by 0.75% on Wednesday to a new range of 3.00% - 3.25%. Fed policymakers’ median rate forecasts now indicate 4.4% by the end of 2022 and 4.6% in 2023.

For the Week... 

The S&P 500 sank 4.63%, the Dow Jones Industrial Average fell 4.00% and closed below 30,000 level for the first time since June 17. The tech-heavy Nasdaq Composite lost 5.06%.

Services PMI Improves 

S&P Global’s preliminary U.S. Services purchasing manager’s index (PMI) activity reading rose to 49.2 from 43.7 in August, its highest reading since June. The Prices Charged component led the improvement, falling to the lowest level since January 2021. However, the overall PMI level still remains in contraction as readings above 50 signal expansion.

Defensive Sectors Fall the Least

All 11 S&P 500 sector groups posted negative returns again last week, with Consumer Staples (-2.15%), Utilities (-2.99%) and Healthcare (-3.36%) having the smallest losses. Energy (-9.00%), still this year’s biggest gainer, fell the most last week, trimming its YTD gain to 32.34%. Consumer Discretionary (-7.01%) and Real Estate (-6.37%) also saw steep losses last week.

Treasury Yields Rise More 

Treasury yields surged last as the Fed raised interest rates, with the 10-year benchmark Treasury yield climbing 0.24% to end Friday at 3.692%. The yield on policy-sensitive two-year Treasury notes surged above 4.28% to reach a fresh 15-year high. The U.S. Dollar Index surged by 3.12% last week.

Market Watch

Chart of the Week: Ocean Freight Costs Reverse

This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on Twitter.