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Capital Market Impact

Get updates on recent capital market data and trends, including possible expectations for future outcomes.

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Capital Market Impact

Market Bounces from Universal Pessimism

Stocks and bonds remain positively correlated, with bonds experiencing an impressive rally as the Bloomberg US Aggregate Bond Index has gained in seven of the past nine weeks. The yield on the 10-year Treasury has dropped 0.75% to 3.50% on hopes for a Fed pivot following a speech by Chair Powell that said, “it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.” 

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Capital Market Impact

Markets continue higher, though protests in China threaten to derail the recovery

The technology sector continues to struggle, led by Apple and several chip companies that will be disrupted by the protests. For the year, the Russell 1000 Value Index is down just 6%, while the Russell 1000 Growth Index is down 25%, though the valuation for the value index remains at a substantial discount to growth (14x vs. 23x). Small caps are also doing well relative to large-cap growth, with the S&P Small Cap 600 Index down 12% with a forward valuation of 13x.