Economy
- U.S. equities posted gains for the week ending October 28, 2022. Stocks were buoyed by the release of better-than-expected gross domestic product (GDP) data, which offset weakness in mega-cap technology stocks. The tech-heavy NASDAQ Composite Index rose modestly during the week despite several widely held companies reporting weak results and providing forward guidance that did not meet the market’s expectations.
- The U.S. economy expanded at an annualized rate of 2.6% in the third quarter of 2022, reversing the corresponding 1.6% and 0.6% annualized decreases for the first and second quarters of the year. The upturn in GDP, or economic growth, was attributed to increases in exports, consumer spending, and non-residential fixed investments. Additionally, personal income rose $291.2 billion in the third quarter due to a jump in compensation. However, higher employee compensation costs could have an adverse impact on corporate earnings going forward.
- The ongoing upturn in mortgage rates appears to be weighing on home prices as more prospective buyers are being priced out of the market. According to the U.S. Federal Reserve, the average interest rate on a 30-year fixed-rate mortgage was up 14 basis points to 7.08% during the seven-day period ended October 27—the highest level since December 2001. The average 30-year rate has climbed 3.97% since the beginning of 2022.
Stocks
- U.S. equities were in positive territory. Industrials and utilities were the top performers, while telecommunications and consumer discretionary lagged. Value stocks led growth stocks and small caps beat large caps.
- Global equities closed higher for the week. Developed markets fared better than emerging markets.
Bonds
- The 10-year Treasury bond yield decreased to 4.01% during the week.
- Global bond markets were in positive territory this week.
- Global government bonds led, followed by global corporate bonds and high yield bonds.
