Weekly Market Commentary

Weekly Market Commentary – 11/4/2022

-Darren Leavitt, CFA

Wall Street incurred another week of losses as investors digested another 75 basis point rate hike from the Federal Reserve.  Hopes of a pivot away from a hawkish stance were diminished when Fed Chairman Powell conveyed that the Fed’s policy rate would likely be higher than previously expected and stay in place for longer.  However, the chairman acknowledged that the rate increase pace might be lower as the central bank assesses the effects on the economy of its previous rate hikes.  The odds of a 50 or 75 basis point hike at the Fed’s December meeting are about even.  Of note, the Bank of England increased its policy rate by 75 basis points, and ECB President Lagarde indicated the European block would also need to raise its policy rates to rein in inflation.  Emerging markets rallied on a Brazilian election won by Lula and on hopes that China would move away from its zero Covid policy.  Brazilian markets increased by 7.69% on the week, while large-cap Chinese issues advanced by 10.68%.

The S&P 500 lost 3.35%, the Dow fell 1.4%, the NASDAQ gave up 5.65%, and the Russell shed 2.54%. The US Treasury curve inverted further as the 2-year note yield increased by twenty-five basis points to 4.67%, and the 10-year yield increased by fifteen basis points to 4.16%.   Late in the week, a coordinated effort to intervene in the currency markets appeared in play.  The dollar, which had sat at highs, fell sharply on Friday against the Euro, Yen, Sterling, and Yuan.  Oil and copper prices surged on the notion of a “reopening” of China.  Oil prices increased by $4.75 or 5.4% to $92.64 a barrel. Copper prices rose 7.4%, closing at $3.69 a Lb.  Gold prices increased by 2$ or $33.4 to close at 1678.10 an Oz.

Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness.  All such third party information and statistical data contained herein is subject to change without notice.  Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person.  Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures.  All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

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