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Market Snapshot 9.30.22- The Most Destructive Quarter

Good Friday Morning on this last day of September and Q3,

This may have been (and I am pretty sure it has been as I researched it), the most destructive quarter to assets since 2008 and the biggest swing from peak to trough in 80 years. No, I am not reflecting on that last part from personal memory.

The chart below though speaks a thousand words.

Lots of data out today.

Mostly in line with expectations other than Core PCE (personal consumption expenditures, the Fed’s favorite inflation metric) which was up because of rent/utility prices and the Chicago Purchasing Managers Index, which shows manufacturing has fallen off a cliff and is now in contraction mode. Markets are, for now, having a muted reaction which I don’t think anyone is particularly upset about but I am nonetheless surprised.
• PCE MOM 0.3 vs 0.3
• Core PCE MOM 0.6 vs 0.5
• Pers Spend 0.4 vs 0.2
• Pers Inc 0.3 vs 0.3
• Chicago PMI 45.7 vs estimates of 51.8
• Consumer Sentiment rev lower from 59.5 to 58.6

Next week (next quarter) is busy.

We have a slew of data from CPI to PPI and a few jobs reports. That last part will be key to any rate improvement as it will be the only jobs report before the November Fed meeting.

Keeping it real, on this day in 1981, the U.S. government issued new 20-year Treasury bonds at a 15.78% yield, an all-time record-high interest rate for any U.S. government issue. Analysts said they expected that yields would have to go higher “to attract stronger demand.” Yields promptly began going down and kept going down for the next twelve years.

Please remain safe and stay healthy, enjoy the weekend and first, make today great!