Welcome to our October 2023 Market Update Video!
Don’t Look at your September statement! I’m just kidding…
While September didn’t deliver us more positive returns in the stock market, it declined about 5% for the Month.1
Interest rates, as evidenced by the US 10-year treasury seem to have been the culprit as they rose almost 10%.2 To me, this is a huge move and no doubt the reason we saw weakness in stocks. But, maybe this isn’t a horrible thing for investors. With interest rates higher, it may be possible to simply earn a nice return while waiting until some of this dust settles to put more money into assets such as stocks.
Also notable, the US dollar continues to strengthen against other currencies. The US Dollar Index (DXY) closed September just above 106, its highest point of the year.3
I feel like these are a lot of moving parts, so what is going on? We continue to watch the Federal Reserve try and fight elevated inflation with a stance to not only hike rates, but also leave them higher for longer. I believe this is like slowly pinching a garden hose that’s trying to spray water! With borrowing costs rising, this may put pressure on spending and borrowing which results in pressure on stocks, consumers and the economy.4
Who benefits? Savers. Anyone with a pile of idle cash, may be able to earn some meaningful interest in a money market or CD.5
Ok, it’s time for another one of those deep breaths. I believe in cycles for markets and while we navigate the current landscape, it will inevitably change. I continue to advocate for diversified portfolios because really, no one knows what’s next.
Thank you for taking the time to hear me out and please let me know if you have any questions or feedback. See you next month!
Successfully,
Tim Truebenbach, CFP®
Senior Vice President – Financial Advisor