facebook Global Market Commentary – November 2022

Global Market Commentary – Positive November

U.S. Markets Advance in November

Economy Market Insights

Markets turned in another positive month in November, on the heels of October’s best monthly return in decades.

While November’s returns were not nearly as positive as the record-setting October, they were in stark contrast to most of the other months this year, as investors struggled with declines in January, February, April, May, June, August, and September. And while two months don’t make a trend, it left investors hopeful that we might see a December rally.

In departing from U.S. markets, performance in developed markets outside the U.S. was even better – as 38 of the 38 developed markets tracked by MSCI were positive, with most jumping more than 10%. Performance in the emerging markets tracked by MSCI was also positive, as 41 of those 46 indices advanced, with 23 indices jumping more than 15%.

For the month of November:

  • The DJIA gained 4.9%;
  • The S&P 500 moved up 5.6%;
  • NASDAQ advanced 5.2%; and
  • The Russell 2000 added 1.6%.

The themes that drove market performance in November were many. Once again, inflation fears and hopes that the Fed might slow its pace and magnitude of rate hikes were the two themes that Wall Street fixated on the most. And while inflation remained stubbornly high, the CPI and PPI improved. Other more-positive themes emerged as well – namely that 3Q corporate earnings - were better than feared, housing seemed to be cooling off, and GDP saw positive growth.

Volatility, as measured by the VIX, declined in November, beginning the month shy of 26 and ending the month just above 20, with most of the decline occurring during the second half of the month.

West Texas Intermediate crude also declined most of November, shedding about $6/barrel as it went from about $88 to $82/barrel, hitting a low of $76/barrel on November 25th before rising $6.

Market Performance Around the World

Investors looking outside the U.S. saw excellent performance, as 38 of the 38 developed markets tracked by MSCI advanced in October, with 24 indices gaining more than 10%.

Performance for emerging markets was also excellent, with 41 of the 46 indices positive for the month, with 23 gaining more than 15%.

Index Returns November 2022
MSCI EAFE 11.09%
MSCI EURO 13.44%

Source: MSCI. Past performance cannot guarantee future results.

Sector Performance Was Excellent

For November, sector performance was excellent, as all 11 sectors advanced healthily. For October, sector performance was excellent, as 9 of the 11 sectors were up for the month, with seven up more than 5%.

Surprisingly, November’s sector performance was painted more green versus October’s as both were in stark contrast with September and August, which saw almost all sectors decline for those months. It is also interesting to see the difference 11 months can make, as investors were reeling in January when 10 of the 11 sectors were red (with only Energy gaining that month); March saw 10 of the 11 positive; April and May saw a mixed bag; June was all negative; July was overwhelmingly positive; August was mostly negative, September was all negative; October was almost all positive; and November was all positive. That’s volatility.

In addition, for November, the range in sector returns was broad, with the Materials sector gaining over 10% on the month and the Consumer Discretionary sector barely advancing.

Here are the sector returns for the month of November and October (two very short periods):

S&P 500 Sector October 2022 November 2022
Information Technology 5.66% 4.42%
Energy 23.71% 1.25%
Health Care 8.05% 4.58%
Real Estate 2.92% 6.52%
Consumer Staples 6.89% 5.54%
Consumer Discretionary -1.64% 0.11%
Industrials 12.37% 7.20%
Financials 10.57% 6.06%
Materials 8.58% 10.51%
Communication Services -1.75% 5.05%
Utilities 0.00% 5.51%

Source: FMR

GDP Turns Positive

On the last day of the month, the Bureau of Economic Analysis reported that the real gross domestic product increased at an annual rate of 2.9% in the third quarter of 2022. In the second quarter, real GDP decreased by 0.6%.


“The increase in real GDP reflected increases in exports, consumer spending, nonresidential fixed investment, state and local government spending, and federal government spending, that were partly offset by decreases in residential fixed investment and private inventory investment. Imports decreased.

The increase in exports reflected increases in both goods and services. Within exports of goods, the leading contributors to the increase were industrial supplies and materials (notably nondurable goods), “other” exports of goods, and nonautomotive capital goods. Within exports of services, the increase was led by travel and “other” business services (mainly financial services).

Within consumer spending, an increase in services (led by health care and “other” services) was partly offset by a decrease in goods (led by motor vehicles and parts as well as food and beverages). Within nonresidential fixed investment, increases in equipment and intellectual property products were partly offset by a decrease in structures.

The increase in state and local government spending was led by increases in compensation of state and local government employees and investment in structures. The increase in federal government spending was led by defense spending.

The decrease in residential fixed investment was led by new single-family construction and brokers’ commissions. Within private inventory investment, the decrease was led by retail trade (mainly clothing and accessory stores as well as “other” retailers). Within imports, a decrease in imports of goods (notably consumer goods) was partly offset by an increase in imports of services (mainly travel).”

Companies Less Worried About a Recession

Research firm FactSet set out to answer whether fewer S&P 500 companies discussed the term “recession” during their earnings conference calls for the third quarter compared to the second quarter. The answer was yes.

“FactSet searched for the term “recession” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from September 15th through November 16th.

Of these companies, 179 cited the term “recession” during their earnings calls for the third quarter, which is well above the 5-year average of 63 and the 10-year average of 54. In fact, with about 6% of S&P 500 companies yet to report actual results for the third quarter, this is the third-highest number of S&P 500 companies citing “recession” on their earnings calls going back to at least 2010 (using current index constituents going back in time).

However, 242 S&P 500 companies cited the term “recession” during their earnings calls for the second quarter (from June 15th through September 14th). This is the highest number of S&P 500 companies citing the term “recession” on their earnings calls going back to at least 2010 (again using current index constituents going back in time).

Thus, there has been a 26% quarter-over-quarter decline in the number of S&P 500 companies citing the term “recession” on earnings calls for the third quarter (179) relative to the second quarter (242). Even though the final number of companies citing “recession” for the third quarter will likely finish higher than 179 (with 6% of the index yet to report actual results for the third quarter), it will not finish above the previous quarter’s number of 242.”


Retail Sales Up

The U.S. Census Bureau announced the following advance estimates of U.S. retail and food services sales for October 2022:

  • Advance estimates of U.S. retail and food services sales for October 2022 were $694.5 billion, up 1.3% from the previous month and 8.3% above October 2021.
  • Total sales for August 2022 through October 2022 were up 8.9% from the same period a year ago.
  • The August 2022 to September 2022 percent change was unrevised from virtually unchanged.


  • Retail trade sales were up 1.2% from September 2022 and 7.5% above last year.
  • Gasoline stations were up 17.8% from October 2021
  • Food services and drinking places were up 14.1% from last year.


PPI Shows Positive Inflation Trend

The U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand increased by 0.2% in October, below consensus expectations for a 0.4% increase.

In addition:

  • Final demand prices rose 0.2% in September and were unchanged in August.
  • On an unadjusted basis, the index for final demand advanced 8.0% for the 12 months ending in October.

In October, the rise in the index for final demand can be attributed to a 0.6% advance in prices for final demand goods. In contrast, the index for final demand services decreased by 0.1%.

Prices for final demand less foods, energy, and trade services advanced 0.2% in October following a 0.3% rise in September. For the 12 months ended in October, the index for final demand less foods, energy, and trade services increased 5.4%.

Final Demand Goods

The final demand goods index increased 0.6% in October, the largest advance since a 2.2% rise in June. Most of the October increase can be traced to a 2.7% jump in prices for final demand energy. The index for final demand foods advanced by 0.5%. Conversely, prices for final demand goods less foods and energy decreased by 0.1%.

Product detail goods: In October, 60% of the price increase for final demand goods is attributable to the index for gasoline, which rose 5.7%. Prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced. In contrast, the index for passenger cars declined by 1.5%. Prices for gas fuels and processed young chickens also fell.

Final Demand Services

The index for final demand services fell 0.1% in October, the first decline since moving down 0.2% in November 2020. Leading the October decrease, margins for final demand trade services fell 0.5%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services moved down 0.2%. Conversely, the index for final demand services less trade, transportation, and warehousing increased 0.2%.

Product detail services: A major factor in the October decrease in prices for final demand services was the index for fuels and lubricants retailing, which fell 7.7%. The indexes for portfolio management, long-distance motor carrying, automobile retailing (partial), and professional and commercial equipment wholesaling also moved lower. In contrast, prices for hospital inpatient care increased 0.8%. The indexes for services related to securities brokerage and dealing (partial), apparel wholesaling, and airline passenger services also rose.


Housing Continues to Soften

A few days before the end of the month, S&P Dow Jones Indices released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for September 2022 show that home price gains declined across the United States.

“The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 10.6% annual gain in September, down from 12.9% in the previous month. The 10-City Composite annual increase came in at 9.7%, down from 12.1% in the previous month. The 20-City Composite posted a 10.4% year-over-year gain, down from 13.1% in the previous month.


Miami, Tampa, and Charlotte reported the highest year-over-year gains among the 20 cities in September. Miami led the way with a 24.6% year-over-year price increase, followed by Tampa in second with a 23.8% increase, and Charlotte in third with a 17.8% increase. All 20 cities reported lower price increases in the year ending September 2022 versus the year ending August 2022.”


“Before seasonal adjustment, the U.S. National Index posted a -1.0% month-over-month decrease in September, while the 10-City and 20-City Composites posted decreases of -1.4% and -1.5%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.8%, and the 10-City and 20-City Composites both posted decreases of -1.2%.

In September, all 20 cities reported declines before and after seasonal adjustments.”


“As has been the case for the past several months, our September 2022 report reflects short-term declines and medium-term deceleration in housing prices across the U.S. For example, the National Composite Index fell -1.0% in September, and now stands 10.6% above its year-ago level. We see comparable patterns in our 10- and 20-City Composites, which declined -1.4% and -1.5%, respectively, bringing their year-over-year gains down to 9.7% and 10.4%. For all three composites, year-over-year gains, while still well above their historical medians, peaked roughly six months ago and have decelerated since then.

Despite considerable regional differences, all 20 cities in our September report reflect these trends of short-term decline and medium-term deceleration. Prices declined in every city in September, with a median change of -1.2%. Year-over-year price gains in all 20 cities were lower in September than they had been in August.

The three best-performing cities in August repeated their performance in September. On a year-over- year basis, Miami (+24.6%) edged Tampa (+23.8%) for the top spot with Charlotte (+17.8%) beating Atlanta (+17.1%) for third place. The Southeast (+20.8%) and South (+19.9%) were the strongest regions by far, with gains more than double those of the Northeast, Midwest, and West; the two worst- performing cities were San Francisco (+2.3%) and Seattle (+6.2%).”

Sources: spglobal.com; census.gov; bea.gov; bls.gov; factset.com; msci.com; fidelity.com; msci.com; nasdaq.com; wsj.com; morningstar.com

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