Capital Market Insights – Winter 2023

Highlights 2022

• Major US indices fell in 2022 as the US Federal Reserve hiked interest rates in response to inflation.
• Since December 31, 2021, the DJIA is down 8.8%, the S&P 500 is down 19.4%, and the NASDAQ is down 33.1%.
• U.S. companies raised $180 billion in IPOs in 2022, down 61% from 2021.
• About 170 SPACs went public in 2022, compared to 771 in 2021 when the SEC increased its scrutiny of spaces
  check companies.
• Initial jobless claims for the week ended December 31, 2022 were 204,000, a comparable level to the 224,000 in early January 2022.
• The US 10-year Treasury yield increased from 1.51% on December 31, 2021 to 3.87% on December 31, 2022.
• The CBOE Volatility Index (“VIX”) closed at 21.67 on December 31, 2022, up 25.8% since December 31, 2021.
• The US dollar rose in value as investors sought safe haven.

Breaking News – Wall Street Journal/Financial Times

September 23, 2022: Britain in disarray

“The government of incoming Prime Minister Liz Truss announces big tax cuts and new spending to boost growth, but the plan triggers a financial market crisis that will lead to emergency intervention by the Bank of England.”

November 3, 2022: The Fed continues to hike rates

“The Federal Reserve is raising interest rates by 0.75 percentage point for the fourth straight day and is signaling plans to raise them further, potentially to higher levels than previously expected.”

November 6, 2022: Capital dries up

“Fed rate hikes sucked capital out of markets, with mergers and stock and bond issuance slowing to their lowest levels in over a decade in October.”

November 11, 2022: Crypto collapse

“Cryptocurrency platform FTX is filing for bankruptcy protection – a quick decline for a company that was seen as a trusted platform just a week earlier.”

December 13, 2022: Inflation eases

“Consumer prices rose 7.1% year on year in November, the slowest pace since December 2021, the Labor Department reports. “On December 14, the Federal Reserve “is raising interest rates by 0.5 percentage point, compared to 0.75 percentage point for recent hikes, but is also raising its estimate of how much interest rates will rise in this tightening cycle.”