Market Insights: Last Week in Review with Rusty Vanneman, CFA, CMT, Vol. 84

It’s been a busy month so far and should be an interesting close to the quarter over the next few weeks.

Today, the Federal Reserve begins a 2-day meeting. The expectation is that the Fed raises short-term rates another 75 basis points.

No thanks to last week’s inflation numbers—surprising to the upside (but still below earlier-in-the-year peaks); the US stock market was down nearly 5% last week and international stocks were down nearly 3% (CNBC, Sept. 2022).

  • Losses on Friday were also impacted by shares of FedEx dropping over 21%; their worst daily drop ever, after the shipments company withdrew its full-year guidance and said it will implement cost-cutting initiatives to contend with soft global shipment volumes as the global economy “significantly worsened.” (CNBC, Sept. 2022)

Last week’s losses pushed the month-to-date returns for the stock markets into the red. No places to hide last week except the US Dollar, as bonds and commodities also both lost ground (Morningstar, Sept. 2022).

Ten-year Treasury yields last week finished at 3.45% (up another 13 basis points over the last week) and the highest yield last week was 3.49% (Yahoo! Finance, Sept. 2022). That’s a new cycle high—and the highest level since 2011 (St Louis Fed’s FRED database, Sept. 2022).

  • The yield to maturity on the Bloomberg Aggregate Bond Index also rose last week to 4.30% as of September 16 – also a new cycle high – and it blows out the 10-years highs (Bloomberg, Sept. 2022). I don’t have the data yet showing the last time the Agg yielded more.
  • Theaverage money market yield is now 2.09% as of Sept. 16, 2022 (Crane Data, Sept. 2022). Quick—can you answer what the yield is on your cash holdings?

The average 30-year fixed mortgage rate increased to 6.19% (up 11 basis points) last week (Bankrate, Sept. 2022).

Deeper Dive

Professional money managers might be bearish, but did you know that the percentage of cash held in the average U.S. equity fund as of June 30 is now only 2.84%, up from 1.29% on Dec. 31? According to a Morningstar analysis (Ignites, Sept. 2022).

With fixed income having a terrible year, it’s no surprise we’re likely all getting questions on alternative investments. There are some good stats on the demand on alternatives from LC Kirk (sourced from BofA Global Research, Sept. 2022) that include the nugget that the average household has just over 2% in alternatives now but could have up to 10% in five years.

BofA does a lot of good work on flows. Here’s one we basically all know and feel: “a mass inflow to stocks Nov ’20-Feb ‘22 has ended – no inflows to stocks past 6 months” (BofA, Sept. 2022).

There’s more from BoFA on flows–ETF flows. Is it glass half full (ETFs continue to take market share) or half empty (a short-term peak for ETF market share growth) for ETFs? (BofA, Sept. 2022)

Key economic data from First Trust’s Data Watch on Sept. 14, 2022 included:

  • PPI– The Producer Price Index (PPI) declined 0.1% in August, matching consensus expectations. Producer prices are up 8.7% versus a year ago. “Energy prices continue to whipsaw inflation readings, but one thing is clear, inflation remains well above where the Fed wants it.”
  • CPI– The Consumer Price Index (CPI) rose 0.1% in August, above the consensus expected -0.1%. The CPI is up 8.3% from a year ago. “Reports of the death of the inflation surge were greatly exaggerated.”

The big item on this week’s economic calendar on Calculated Risk:

  • August Housing Starts and Existing Home sales: The Federal Open Market Committee (FOMC) meets this week and is expected to raise rates 75 basis points.

Whether or not the market is past peak inflation is an important consideration for investors. If it is, on average the market has produced an above average return, post a peak in inflation. That said, it’s not a sure thing. There are still plenty of instances of losses a year later per the S&P 500 Returns Period Around Peak Inflation chart for 1947-2022 (Sourced from FactSet, CRSP, Bloomberg, OECD, Investopedia and Bernstein Analysis, Sept. 2022).

Which stocks performed best in the last era of stagflation (1966-1982)? RadioShack was the big winner (Wall Street Journal, Sept. 2022). Remarkably, I shopped at a RadioShack recently–supposedly one of the last ones in America. It was located in the basement of a building and the person waiting on me looked like Iggy Pop and was playing the Dead in the background. Definitely not like the RadioShack’s of yesteryear!

It keeps dropping … Could it be three quarters in a row? Currently, the Atlanta Fed’s GDPNow‘s estimate for real (“after-inflation”) GDP growth (which uses actual economic data for inputs) decreased last week by nearly another 1%. The Q3 2022 GDP estimate is now at +0.5% as of Sept. 15, 2022 (GDPNow).

Crypto Corner – Grant Engelbart, CFA, CAIA, Brinker Capital Sr. Portfolio Manager

  • Cryptocurrency prices fell last week, with Bitcoin dropping 9% on the week and Ethereum dropping over 20% despite a successful ‘Merge’ (sell the news). Bitcoin and Ethereum hovered around $19,600 and $1,400 Sunday afternoon. Most other major coins fell as well but less than Ethereum’s drop. (, Sept. 2022)
  • The much-anticipated Ethereum merge occurred during the early morning hours last Thursday. The merge is the transition of the Ethereum blockchain from Proof-of-Work to Proof-of-stake, a move that is expected to reduce energy consumption by 99%. The new PoS blockchain is also expected to reduce Ethereum issuance by as much as 90%, and some even see the supply shrinking in the future. This may have profound implications for future prices. Traditional Finance (‘TradFi’) firms Schwab, Citadel, and Fidelity are apparently working on their own version of a crypto exchange. (Arcane Research, Sept. 2022). A woman in Australia mistakenly received $7 Million from exchange as a refund that was supposed to be $70. She’s not giving it back… (Bloomberg, Sept. 2022)
  • The first 33 act Bitcoin futures ETF launched last week, the Hashdex Bitcoin Futures ETF (DEFI). Teucrium trading and Victory Capital are also involved in the funds management and development. 33 act ETFs are generally taxed more advantageously than more familiar 40 act funds but can come with the unwanted K-1 tax form. (, Sept. 2022)
  • Be sure and check out these upcoming Orion digital asset events: Webinar with Eaglebrook on Wednesday and Eaglebrook conference October 10-12 In Miami!

Additional Resources

It’s a fair question, but are NFTs like what Beanie Babies once were? Remember Beanie Baby Craze? (YouTube, Aug. 2021)

Ray Dalio has his fans, and his latest It Starts With Inflation article from LinkedIn on Sept. 13, 2022, has been getting some buzz. Warning: it’s a negative take on short-term stock market direction as he thinks inflation and interest rates will go higher than most people think.

“Life always has a fat tail.” — Eugene Fama, quoted in When Genius Failed (GoodReads, Sept. 2022)

Last week’s Orion’s The Weighing Machine podcast was with Blackrock’s Michael Gates who manages their ETF model portfolios. It was rock solid and shows why the BlackRock models have been successful on multiple platforms. This week’s podcast is also a real treat. It’s with Lori Hardwick, who is a C-Suite/FinTech Advisor, Strategic Growth Business Advisor, Speaker, Private Equity Investor, and Board Director on multiple boards past and present, including Orion’s. It’s obvious that Lori is a star.

Never too soon to start thinking about what books to buy for holiday gift giving. I bet this one finds its way into a few stockings: Ryan Holiday’s Discipline is Destiny.

Repetitive messages sell! I repeat: repetitive messages sell! Check out the graphic in the classic BeFi book: Thinking, Fast and Slow.

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Thanks for reading and have a great week! As always, please let us know what we can do better at or Invest well and be well.



Orion Portfolio Solutions, LLC, a registered investment advisor, is an affiliated company of Brinker Capital Investments, LLC, a registered investment advisor, through their parent company, Orion Advisor Solutions, Inc.

The CFA is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit

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About Rusty Vanneman, CFA, CMT, BFA
Rusty Vanneman serves as the Chief Investment Strategist for Orion Advisor Solutions. An industry veteran with more than 30 years of investment experience, Rusty creates relevant market- and platform-related content that supports deeper, more engaging conversations with advisors and investors, educating key internal and external audiences on Orion Portfolio Solutions’ strategies and resources to help deliver favorable investor outcomes, and helps identify new investment offerings to meet growing marketplace demand.  Rusty is a host of Orion’s The Weighing Machine weekly podcast, Orion’s monthly Weighing the Risk podcast, and authored the book “Higher Calling: A Guide to Helping Investors Achieve Their Goals.” Rusty has managed multiple mutual funds and hedge funds during his career and was named one of the Top 10 Portfolio Managers to Watch by Money Management Executive.* Prior to Orion’s acquisition of Brinker Capital in 2020, Rusty was the Chief Investment Officer for Orion Advisor Solutions and prior to that was the President and Chief Investment Officer of CLS Investments.  Before joining Orion in 2012, Rusty served as the Chief Investment Officer and Managing Director for a multi-billion-dollar registered investment advisor (Kobren Insight Management) in the greater Boston area. His 11-year tenure at the RIA included a five-year span when the firm was owned by E*TRADE Financial where he also served as the Senior Market Strategist for E*TRADE Capital. Prior, Rusty was a Senior Analyst at Fidelity Management and Research (FMR Co) in Boston. Additional work experience includes Thomson Reuters, General Electric, and as a cattle ranch hand in the Nebraska Sand Hills. Rusty received his Bachelor of Science in Management from Babson College in Wellesley, Massachusetts, where he graduated with high distinction. He holds the Chartered Financial Analyst (CFA®) designation and is a member of the CFA Institute. He is also a Chartered Market Technician® (CMT) and is a member of the Market Technician’s Association (MTA). He is also a Behavioral Financial Advisor (BFA). *RUSTY VANNEMAN MONEY MANAGEMENT EXECUTIVE AWARD. Rusty Vanneman, CFA, CMT, was selected as a “Top 10 Fund Managers to Watch” in 2017 by Money Management Executive. Money Management Executive is an unbiased, third-party publication covering the asset management industry. Money Management Executive chose the list of managers to watch by screening Morningstar data from funds with a single manager, ranked as having the best three-year annualized returns in their respective categories. The list of managers was published March 27, 2017. Money Management Executive is not affiliated with OPS. Ratings and awards may not be representative of any one client’s experience and are not indicative of OPS’s future performance.