General Market Commentary as of September 30, 2023
The second half of the year started with all US major indices posting negative returns for the third quarter of
2023. The S&P 500 ended the quarter down -3.65%, the Dow Jones Industrial Average lost -2.62%, and the
Nasdaq Composite declined -4.12%. Value underperformed growth within large caps, but outperformed within
small caps. Overall, large cap companies outperformed small cap companies, and equity indices outperformed
REIT indices. Developed markets outside of the US were down as well for the quarter and underperformed both
US and emerging markets.
Interest rates increased in Q3 across all bond maturities in the US Treasury market. For the quarter,
intermediate-term US treasury bonds returned -0.81% and intermediate-term corporate bonds returned -0.96%.
The total returns for short- and intermediate-term municipal bonds were -0.94% and -2.96%, respectively.
Within the municipal fixed income market, general obligation bonds returned -4.10% while revenue bonds
returned -4.04%.
Home sales in the US have slipped to their lowest level since April 2020. The 30-year mortgage rate in the US has
climbed to 7.31% and home prices hit a new all-time high in July. This has caused home affordability to drop to
record lows. The Federal Reserve held interest rates steady in September, following a 0.25 bps increase back in
July. And they didn’t rule out another rate hike before the end of the year and expected fewer cuts next year
than previously indicated.
Although it seems that a number of negative themes hit the market during Q3, some bullish aspects are present
on the labor and inflation front. The combined power of a healthy consumer and job market is helping both the
economy and the stock market which could reflect in high consumer confidence heading into the holiday
shopping season.
Market Recap
| Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
|---|---|---|---|---|---|
| S&P 500 | -3.65% | 19.59% | 8.44% | 8.03% | 4,288.05 |
| Dow Jones Industrial Average | -2.62% | 16.65% | 6.45% | 4.84% | 33,507.50 |
| NASDAQ Composite | -4.12% | 25.00% | 5.78% | 10.44% | 13,219.32 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.
