Week Ending 10/27/2023


US stocks fell by 2.57% and international stocks by 1.10%. US stocks are now in correction territory, down 11.05% from their July high. Bonds managed a 0.64% rally. The US economy grew at a robust 4.9% in Q3, up from 2.1% the quarter prior. The GOP elected a speaker, Mike Johnson, after a couple of weeks of going through a series of nominees.


Week Ending 10/20/2023


US stocks fell by 2.37% and international stocks by 2.75%. Bonds dropped by 1.75%. The yield on the treasury hit 4.98% this week, the highest level since July 2007. The yield has had a steep rise since the Fed last increased interest rates in late July (up over one percentage point). Stocks are now down by 7.5% since July 26th.

86 S&P 500 companies have reported earnings, recording a 4.9% increase over last year. Almost 3/4 have topped estimates.

The Fed seems like it will hold off on interest rate increases for the time being but is sticking with the higher for longer theme.


Week Ending 10/13/2023


US stocks etched out a small 0.27% gain on the week despite the aftermath of the Hamas terrorist attacks on Israel. Oil, gold, defensive stocks, and the US dollar increased as beneficiaries of the Hamas terrorist attacks. Some investors are thinking that the Fed pivot on interest rates might be in sight. Several Fed officials said that the big increases in bond yields have tightened financial conditions, in other words, the market may have already done a lot of the Fed’s anticipated future work.


September 2023 Recap

September 2023: A Grim Harvest for Financial Markets

September proved to be a harsh month for financial markets, echoing the falling autumn leaves with a sharp decline across major asset classes. Here’s a closer look at the key themes:

Stocks Plummet:

  • The bears feasted in September, sending major indices reeling.
  • The S&P 500 tumbled 4.8%, the Dow Jones shed 3.4%, and the Nasdaq Composite plunged 5.8%.
  • Technology stocks, once the market darling, led the downward charge, facing the brunt of higher interest rate concerns.
  • All other sectors, except energy, ended the month in the red.

Hawkish Fed Hammers Sentiment:

  • The Federal Reserve delivered another 0.25% rate hike, but its hawkish rhetoric cast a long shadow.
  • Officials hinted at continued tightening, even at the risk of economic slowdown, to combat persistent inflation.
  • This triggered fears of an “earnings recession” and further dampened investor sentiment.

Weaker Economic Data:

  • Economic data pointed towards a potential slowdown.
  • Retail sales and industrial production grew at a slower pace, while consumer confidence remained subdued.
  • These numbers fueled concerns about the impact of higher rates on economic activity and corporate profits.

Bond Yields Climb:

  • The 10-year Treasury yield soared from 4.15% to 4.58%, reflecting the market’s anticipation of more rate hikes.
  • This further pressured growth stocks and caused a flight to safety towards bonds.

Global Malaise:

  • International markets mirrored the US weakness.
  • The MSCI EAFE fell 3.4%, with European economies grappling with energy shortages and inflationary pressures.
  • Emerging markets suffered even more, with the MSCI EM dropping 2.6% amidst slowing growth in China and global risk aversion.

Other Notable Events:

  • The UK entered a recession, raising concerns about a similar path for other economies.
  • Geopolitical tensions remained elevated, with the war in Ukraine and US-China relations presenting uncertainties.
  • Supply chain disruptions continued to impact businesses and add to inflationary pressures.

Overall, September 2023 was a harsh reality check for financial markets. The optimism of earlier months dissipated under the weight of rising interest rates, slowing economic growth, and heightened geopolitical anxieties. October will be crucial in determining whether this downturn is a temporary blip or a sign of a longer-term bear market.