Weekly Commentary | Sept 18, 2022
Macro Picture
Stocks took a beating this past week as inflation fears fueled by the latest CPI report took interest rates to levels not seen since 2007. The S&P had the largest weekly drop since mid-June and fell all the way back to mid-July levels. We also had comments on Friday from the FedEx CEO saying based on what he is seeing, a global recession is ahead.
After the market closed on Thursday, FedEx announced it was pulling its earnings guidance for FY 2023 due to "expectations for a continued volatile operating environment,” and its new CEO told a CNBC interviewer that he expected a global recession. FedEx stock fell by about 21% in trading on Friday.
Growth stocks took the brunt of the selling as the Nasdaq fell 5.5% on the week. Google and Facebook hit new 52-week lows. Real estate shares fell 6.5% on the week, besting the tech sector to the downside. Energy, healthcare, and consumer staples were down the least in the 2-3% range.
The VIX, despite the sell off, never hit 30 so the selling was quite orderly.
The question is, "have we reached peak inflation?"
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