Market Recap: September 2022

October 07, 2022
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Market commentary

  • The revised estimate of second quarter GDP showed a modest contraction of (0.6%), marking consecutive negative GDP prints and heightening expectations that the U.S. has or will fall into a recession
  • Headline inflation decelerated slightly in August, although core inflation increased
  • Jobs are plentiful even with the unemployment rate ticking up to 3.7% as participation increased
  • Consumer confidence increased again following a recent string of declines, signaling a potential positive for consumer spending

 

Select economic and market data

Statistic (monthly unless noted)

Current

Previous

U.S. GDP (quarterly) -0.6% -1.6%
Consumer Confidence 108.0 103.6
Consumer Price Index Y/Y 8.3% 8.5%
Retail Sales 0.3% 0.0%
Unemployment Rate 3.7% 3.5%
2-Year Treasury Yield 4.28% 3.50%
10-Year Treasury Yield 3.83% 3.20%

 

Equities

  • Stocks fell again in September, with the S&P 500 losing over 9% for the month and moving into bear market territory for the year
  • Losses were broad-based for the month, with all major indices posting near-double-digit losses
  • As of quarter-end, nearly all major stock indices have declined at least 20%
Equities Indices September 2022

 

Fixed income

  • Treasury rates moved sharply higher as the Fed maintained its tighter monetary policy stance
  • The yield curve remains inverted, which is often associated with recessionary periods
  • Aside from T-bills, bond prices fell in September and are sharply lower for 2022
Fixed Income Indices September 2022

 

Strategic outlook

  • Some caution is warranted on equities; slightly favoring small-cap and mid-cap domestic stocks for long-term returns
  • Maintaining shorter-duration fixed income structure as the rising interest rate environment is likely to persist
  • While some patience may be required, longer-term value exists in select equities
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