US stock market
In September, the benchmark US stock market index SP500 fell by 8.97% — from 3956.50 to 3601.50, Nasdaq100 fell by 10.60%. The fall since the beginning of the year for the SP500 was 24.51%, for the Nasdaq100 — 33.08%.
Amid sell-offs in almost every class of financial asset, the safe-haven dollar index rose 3.15% in September and 16.50% YTD.
The cost of a 5-year credit default swap (CDS) in the US rose by 13.16%, the figure at the end of the month was 21.50.
Fed
Excerpts from FOMC statement (November 2, 2022)
- The committee decided to raise the target range for the federal funds rate to 3.75%-4.00%. The committee expects that a continued increase in the target range will be appropriate to bring inflation back to 2% over time.
- The Committee will continue to reduce its holdings of Treasury securities and agency debt, as well as agency mortgage-backed securities, as described in the Federal Reserve’s May plans to reduce the size of the Federal Reserve’s balance sheet.
- In determining the pace of future increases in the target range, the Committee will take into account cumulative monetary tightening, the lag in which monetary policy affects economic activity and inflation, and economic and financial developments.
Inflation
In September, the consumer price index increased by 0.4% seasonally adjusted and rose by 8.2% over the past 12 months seasonally adjusted.
Core CPI (excluding food and energy) rose 0.6% in September to 6.6% YoY.
Inflation in the USA
The median consumer price index (calculated by the Cleveland Federal Reserve Bank and considered the best indicator of underlying inflation trends) fell 9.22% in September.
Median CPI
Economic indicators
The GDP deflator in the 3rd quarter was 4.10%.
GDP deflator
Labor market
- Number of initial claims for unemployment benefits: 214K (previous revised: 226K);
- Change in the number of people employed in the private non-agricultural sector: 275K (previous revised: 308K);
- Unemployment rate: 3.5% (prev. 3.5%).
US GDP (QoQ): +2.6% (prev. -0.6%).
The Fed’s balance sheet for September fell by 0.35% ($30.526 billion), from April (from the peak) – by 1.90% ($169.920 billion).
Fed balance sheet
The yield spread of 10- and 2-year Treasury bonds remains in the negative zone at -0.47%.
The yield spread of 10-year and 3-month Treasury bonds also went negative: -0.16%.
The average fixed-rate mortgage exceeded 2008-2009 levels by 30 years. and amounted to 7.08%.
Eurozone
European Central Bank Monetary Policy Decisions (October 27, 2022)
- European Central Bank Monetary Policy Decisions (October 27, 2022)
- The Board of Governors has decided to raise the ECB’s three key interest rates by 75 basis points. The interest rate on the main refinancing operations and the interest rates on the margin credit line and the deposit line will be increased to 2.00%, 2.25% and 1.50%, respectively, from November 2, 2022.
- The Board of Governors also decided to change the terms of the third series of targeted long-term refinancing operations (TLTRO III).
- Asset Purchase Program (APP) – reinvest in full.
- Pandemic Contingency Buying Program (PEPP) to reinvest principal payments of securities maturing through at least the end of 2024.
IPO (US)
US IPO Annual Yield 2022
IPO activity in 2022
2022 US IPO Revenue
