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. 

^VIX data by YCharts

The question is, "have we reached peak inflation?"