Thought Leadership By Our Team

With a new year comes a new format for our quarterly market discussions. We value your time and want to make the market information we present more concise and easier to read. To that end, we are doing away with the multi-page version of two reports (last year’s review and this year’s outlook). We’re combining those pieces and making them easier to follow with more bullet points summaries and illustrative graphics. We hope you enjoy the format.

U.S. equities had a strong third quarter across large, mid, and small-cap equities despite several stretches of market volatility along the way. Domestic large cap equities, as measured by the S&P 500, continued their movement upward as year-to-date gains ended the quarter up 22.1% for the year.

Equities got off to a rocky start in April with a small pullback of about 5.5% in the S&P 500. However, sentiment quicky changed in May and June as a continuation of solid economic data combined with tamer inflation gave a boost to stocks and propelled the S&P to new all-time highs the last two months. For the quarter, the S&P 500 total return rose 4.3%, after a stunning 10.6% rise in the first quarter.

Markets continued to rise for the second quarter in a row and the S&P 500 stayed on a stable upward path over the last five months. For the quarter the S&P total return rose an impressive 10.6% which we attribute to good economic data on inflation and the economy...

Last year, we titled our outlook piece “Prospects Brighten as Fed Slows” with the focus on the Federal Reserve because we believed it held the majority of control over the path of the economy and financial markets. That was the correct narrative as we waited with bated breath for every monthly economic report on prices, jobs, wages, and interest rates, which all went the direction we wanted.

The year 2023 was the investment year we had all hoped for, but no one was expecting. Coming off 2022, which saw double digit declines in both equities and fixed income, most Wall Street economists called for a 100% chance of recession in the U.S. economy in 2023. The “Great American Job Market” had other ideas. With inflation coming under control and unemployment rates at historic lows, the American consumer remained strong, corporate balance sheets shrugged off higher interest rates, and the S&P 500 ended the year up an impressive 26.3% total return.

The third quarter saw equities go from modestly positive in July (S&P 500 rose 3.2%), to slightly negative in August (S&P 500 fell -1.6%), to unfavorably negative in September (S&P 500 fell -4.8%). Sentiment turned wary after a strong double-digit gain in the S&P 500.

If you find yourself with a bit of extra time on your hands in the upcoming months, you may want to use this time to check in with your family’s finances.

In general, markets continued to gain strength in the second quarter after the first quarter bounce back. We finished the first half the year in a much better state than most had anticipated. Leading the quarterly index performance once again, was the S&P 500 Index.

Markets bounced back into positive territory in the first quarter of 2023 after posting difficult double-digit declines in 2022.

The year 2022 never had a chance of success as witnessed by the first week of trading that saw record new highs in early January erased within days, followed by a correction (-10%) and a bear market (-20%) in equities in a short period of time.

Last year, we titled our outlook piece “Year of Fed Tightening” and put the focus on the Federal Reserve because we believed it held the majority of control over the path of the economy and the markets.

Equity markets stayed positive all month despite slowing economic data and muted earnings reports. All major U.S. equity indexes were up with the only negative monthly return seen in emerging markets, down -3.1%.

Equity markets already had the worst first half start in over 50 years, and after a late summer rebound, the S&P 500 found a new low by quarter-end. During the quarter, markets looked to the Fed’s harsher stance on combatting inflation and got less optimistic about a Fed rate pause and achieving a soft economic landing.