Welcome back to the Monthly Market Wrap from YCharts, where we review and break down the most important market trends for advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.
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The inverted yield curve remained firmly inverted in September as the 3-Year Treasury Notesported the highest rate among US Treasuries. In addition to the 3-Year, yields on the 1-Year, 2-Year, 5-Year and 20-Year instruments were all north of 4%. The long-term 30-Year Bond was sporting the third-lowest yield of all Treasuries as of September 30th. In yield spread news, the widely-followed 10 Year-3 Month Spread grew positive but the 10-2 Year Spread remained inverted by 39 basis points.
Off the YCharts! Are the Bears Headed for Hibernation?
October has arrived. It’s a month synonymous with scary movies and trick-or-treating, and also the time of year for bears to go into hibernation.
…Bullish investors are hoping market bears do just that.
According to the American Association of Individual Investors (AAII), 60.8% of investors surveyed expressed bearish sentiment at September’s close. The AAII Investor Sentiment Survey, which gauges association members’ feelings about the stock market over the next six months, recorded its third-most bearish reading since mid-1987. Only in October 1990 and at the tail-end of the 2008 Financial Crisis were investors more bearish than they are now. Perhaps when spooky season is over, a Santa Claus rally can save the day?
Growth stocks, represented by the iShares Russell 1000 Growth ETF (IWF), tumbled nearly 10% in September and are down 22.7% on a TTM basis. Their Value (IWD) counterparts fell mostly in tandem throughout September to end the month down 8.7%. Despite the similarly negative performances, Growth stocks are down twice as bad as Value on a TTM basis.
August yielded mixed production and sales data. US Retail and Food Services Sales grew 0.3%, but the US ISM Manufacturing PMI edged down nearly two full points to 50.9. The ISM Manufacturing PMI has suffered a steady decline in the last twelve months, falling over 10 points but just barely remaining in “expansion” territory.
The price of gold fell 2.6% MoM to $1,671.80 per ounce as of September 30th, and is down 7.4% year-to-date. Gold-related investment vehicles delivered a mixed month of results as well. The SPDR Gold Shares ETF (GLD) slipped 2.9% in September, but the VanEck Gold Miners ETF (GDX) rose 1.3% as some of the fund’s largest constituents bounced back from disappointing earnings.
Crude oil prices tumbled to their lowest levels since the start of 2022. The spot price for WTI at the end of September was $77.17 (-14.3% MoM) and $82.55 for Brent (-14.5% MoM). However, the lower oil prices have yet to translate to savings at the gas pump. The average price of regular gas was $3.83 per gallon in the final week of September, representing just a 2.7% MoM decline. Regular gas is currently 13.3% more expensive since 2022 began, but 25% below its June high. Premium gas prices fell only 1.2% MoM to $4.60 per gallon at the end of September.
Falling temperatures and a new Game of Thrones prequel series can only mean one thing: winter is coming. For Bitcoin and Ethereum holders, however, the “crypto winter” only grew colder in September. The price of Bitcoin slipped 1.2% in September to $19,564 as of month’s end. Ethereum plummeted 12.4% to settle at $1,336. Binance Coin holders enjoyed a second consecutive month of gains, up 0.9% to $283.75 as of September 30th, though year-to date performance remains firmly in the red. Binance Coin is 45.0% lower YTD, Bitcoin is down 59.6%, and Ethereum is off 65.6%.