| Index | Third Quarter 2022 | Year To-Date 2022 |
| S&P 500 | -5.3% | -24.8% |
| Dow Jones Industrial Average | -6.7% | -21.0% |
| Russell 2000 | -2.5% | -25.9% |
| MSCI EAFE (International Index) | -10.4% | -27.2% |
| Barclays Aggregate Bond | -4.6% | -14.5% |
Performance Source: Koyfin
U.S. Versus International
The S&P 500, an index of large U.S. companies, posted a total return of -5.3% for the Third Quarter of 2022. U.S. stocks outperformed international for the quarter as measured by the iShares MSCI EAFE ETF, a representation of international stocks outside the U.S. EAFE total return for the Third Quarter of 2022 was -10.4%.
The European Central Bank raised interest rates by 0.75% on September 8, 2022. This prompted a more aggressive fall in international stocks as fears of an economic slowdown rose. Increasing tensions in Ukraine and between China and Tiawan also contributed to the steeper fall in international stocks.
Brazil and other South American countries experienced positive stock market returns for the quarter. GDP in Brazil has an unexpected rise of 1.2% from between April and June. Economic leaders continue to expect growth for the remainder of the year and into 2023. Inflation readings were also lower than expected. China and Asian countries were the weakest for the quarter, as anticipation of slower growth in U.S. and Europe hurt expectations.
U.S. Sectors
Top performing U.S. S&P 500 sectors as reported by Koyfin for the Third Quarter of 2022 by total return include Consumer Discretionary (3.8%), Energy (1.8%) and Financials (-3.0%). Laggards for the Third Quarter include Communications (-11.6%), Real Estate (-11.1%) and Materials (-7.1%).
Top performing S&P 500 sectors as reported by Koyfin year-to-date through September 30, 2022, include Energy (33.9%), Utilities (-6.5%) and Consumer Staples (-11.9%). Laggards year-to-date include Communications (-37.9%), Technology (-31.2%) and Consumer Discretionary (-29.9%).
Areas that can seemingly benefit from higher interest rates such as Energy and Financials remained strong in the Third Quarter. Consumer spending remained steady, which aided discretionary stocks. Weak sectors are areas that typically hurt when interest rates rise. Communications and Real Estate are high dividend stocks. As bonds offer higher interest rates, the risk-reward for these stock dividends may not be as attractive.