Mid-Month Market Updates - Grindstone Intelligence

March 15, 2023March 16, 2023

Mid-Month Market Update: March 2023

Technical Trends

US large cap stocks erased their hot start to the year, declining more than 5% over the past month. The S&P 500 Index has dropped back below a falling 200-day average. The Dow Jones Industrial Average is down just 2.4% over the last year, but it’s been the laggard so far in 2023. The NASDAQ Composite, meanwhile, has been the best performing major index over the last month and quarter.

Bond prices continue have risen dramatically over the past week, after turbulence in the banking sector spooked investors. Still, the 10-Year Treasury note remains below a falling 200-day moving average – clear evidence that a downtrend still exists. While yields are down from their October peak, the threat of continued policy tightening by the Federal Reserve remains a risk for fixed income investors.

February 15, 2023February 15, 2023

Mid-Month Market Update: February 2023

Technical Trends

US large cap stocks have jumped more than 7% to start the year and continue to erase last year’s decline. The S&P 500 Index is further above its 200-day average than at any point in the last 12 months, as stocks attempt to enter a new bull market. The Dow Jones Industrial Average is down just 1.4% over the last year, while the NASDAQ Composite has been the best performing major index over the last month and quarter.

Bond prices continue to fall as interest rates rise. The 10-Year Treasury note is stuck below a falling 200-day moving average – clear evidence that a downtrend still exists. While yields are down from their October peak, continued policy tightening by the Federal Reserve poses a threat to fixed income investors over the coming months.

January 17, 2023February 15, 2023

Mid-Month Market Update: January 2023

Technical Trends

US stocks have rallied over the last several months, a welcome reprieve from the persistent downward pressure that punished investors for most of 2022. The S&P 500 has returned to its 200-day moving average for just the second time since last spring, threatening to put an end to its technical downtrend. The Dow Jones Industrial Average continues to be the outperformer among the major US indices, rising more than 15% over the last quarter. It’s now down only 5% over the last year. The NASDAQ Composite, meanwhile, would need to rally more than 40% to return to all-time highs.

Bond prices are still in a clear technical downtrend, as the 10-Year Treasury note is stuck below a falling 200-day moving average. Still, the benchmark yield has fallen to 3.5%, well below the 15-year highs seen in October.

December 15, 2022February 15, 2023

Mid-Month Market Update: December 2022

Technical Trends

Equity prices have been steady over the last month and continue to be led by the Dow Jones Industrial Average and its tilt towards value stocks. The Dow is down only 4% over the past year, while the growth-oriented Nasdaq Composite is down a whopping 27%. The S&P 500 remains in a technical downtrend, with a current price below a falling long-term moving average. However, even when the index was at its lows for the year, prices never fell beneath their pre-COVID highs.

The 10-year Treasury yield has fallen below 3.5% after touching a 15-year high of 4.3% in October. The decline follows a shift in Fed policy expectations over the coming months. The year has still been a disappointment for bond investors, with the Aggregate US Bond index tracking for its worst annual performance on record.

November 15, 2022February 15, 2023

Mid-Month Market Update: November 2022

Technical Trends

Equity prices have rallied over the last month, led by the Dow Jones Industrial Average and its tilt towards value stocks. The Dow is down only 7% over the past year, while the growth-oriented Nasdaq Composite is down a whopping 29%. The S&P 500 remains in a technical downtrend, with a current price below a falling long-term moving average. However, even when the index was at its lows for the year, prices never fell beneath their pre-COVID highs.

Bonds yields have stabilized, and the 10-year Treasury yield is back below 4% following a shift in Fed policy expectations over the coming months. The year has still been a disappointment for bond investors, with the Aggregate US Bond index tracking for its worst performance on record.

October 17, 2022February 15, 2023

Mid-Month Market Update: October 2022

Technical Trends

Stocks broke their June lows earlier this month after reversing an encouraging 2-month rally that lasted through July and August. The S&P 500 has now fallen more than 20% from its January peak and sits 19% lower than a year ago. Stocks are in a clear technical downtrend, setting distinctive lower highs and lower lows. An additional drop of 6% would push the index all the way back to its pre-COVID peak.

Bonds yields have continued to surge, with the rate on 10-year US Treasuries rising above 4% to its highest level since 2008. The impact on fixed income returns has been disastrous, and the US Aggregate Bond Index is having by far its worst year in memory. With both stocks and bonds under pressure, the traditional 60/40 investment portfolio has been a disappointment to those who’ve set expectations based on long-term historical returns.

September 15, 2022February 15, 2023

Mid-Month Market Update: September 2022

Technical Trends

Stocks remain under pressure in 2022. The S&P 500 fell 7.7% over the last month and is down 11% over the last year. Growth has underperformed Value over that time. Current prices for the benchmark index are 7% below a falling 200-day moving average, indicating a technical downtrend.

Bonds have not acted like a safe-haven for investors during the equity selloff, as the benchmark 10-year yield has doubled from 1.5% to more than 3.4% this year. That’s driven bond prices 14% lower over the course of the last 12 months – among the worst performances on record for a period of that length.