PAS Weekly Commentary

Mega caps support index gains as rates rise

The market had a decent showing this week on the heels of last week's big gains.

Market participants were digesting another heavy flow of earnings news, but that news was largely overshadowed by moves in the mega cap stocks.

The broader market showed nice resilience to selling efforts despite many participants thinking stocks are due for a pullback. The S&P 500 is now up 7.2% from its low close on October 27.

Small and mid cap stocks were an exception, relenting to some selling pressure this week. The Russell 2000 fell 3.2% and the S&P Mid Cap 400 declined 1.6%.

Six of the 11 S&P 500 sectors logged a gain this week. The heavily-weighed information technology (+4.8%) and communication services (+2.2%) sectors were the best performers followed by consumer discretionary (+0.9%). The energy (-3.8%), utilities (-2.6%), and real estate (-2.1%) sectors saw the biggest declines.

A jump in market rates following some Treasury auctions this week, along with commentary from Fed Chair Powell, slowed the rebound momentum for the broader market. The 2-yr note yield climbed 19 basis points this week to 5.05%. The 10-yr note yield rose seven basis points this week to 4.63%.

Sales of 3- and 10-yr notes on Tuesday and Wednesday, respectively, met okay enough demand for the stock market, but Thursday's 30-yr bond auction was met with dismal demand. 

There were several Fed officials speaking this week, but the market was mostly focused on Fed Chair Powell's IMF panel discussion on Thursday. Mr. Powell largely reiterated his remarks from November 1, saying "If it becomes appropriate to tighten policy further, we will not hesitate to do so."

  • Nasdaq Composite: +2.4% for the week / +31.8% YTD
  • S&P 500: +1.3% for the week / +15.0% YTD
  • Dow Jones Industrial Average: +0.7% for the week / +3.4% YTD
  • S&P Midcap 400: -1.6% for the week / +3.1% YTD
  • Russell 2000: -3.2% for the week / +2.6% YTD

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Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Data and rates used were indicative of market conditions as of the date shown and compiled by Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.

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2023-164746 (Exp. 2/24)