Major U.S. indexes were mixed last week after continued uneasiness surrounding the Fed’s more hawkish comments, with the Dow Jones Industrial Average finishing slightly higher and the S&P 500 and NASDAQ finishing lower. Energy was once again the best performing sector for the week, finishing 4.4% higher, followed by utilities (+1.5%), financials (+1.4%), and consumer staples (+1.2%). Consumer Discretionary (-3.1%) and Technology (-2.0%) underperformed most. Ultimately, the DJIA finished the week 0.86% higher, while the S&P 500 and NASDAQ finished the week -0.17% and -1.93% lower, respectively. New housing data was mixed, with housing starts falling 0.5% month-over-month, and new home sales rising 5.8%, above expectations. Lastly, consumer resilience appears to be stronger after consumer confidence was reported to rise to 108.3, breaking a two-month streak of declines.
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Stocks and bonds remained under pressure in Q3. Many of the same factors (i.e. inflation, rising rates, stronger US Dollar, and more restrictive central banks) are negatively impacting returns for both asset classes. Broad indexes of domestic stocks, bonds, and commodities all lost around -5% in Q3 as the S&P 500 fell by -4.88%, the Bloomberg US Aggregate Bond Index declined by -4.8%, and the Bloomberg Commodity Index lost -4.7%. Through Q3, the YTD return on the S&P 500 was -23.87% while the Bloomberg US Aggregate Bond Index fell by -14.6%. Through Q3, a traditional 60/40 portfolio was down by -20.6% YTD. Since 1976, only 2008 finished the year worse at -21%. In addition, there had never been three consecutive quarters in which stocks (as measured by the S&P 500) and bonds (as measured by the Bloomberg US Aggregate Bond Index) had declined until now.
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The indices are presented as broad-based measures of the equity, fixed income, and consumer markets. The indices are provided for comparative and illustrative purpose to provide a comparison of the model against the broader-based equity, fixed income, and consumer market. The indices are not intended to reflect the investment objectives of the model as the securities held within the model will differ in market volatility, concentration, investment objectives, and diversification among others from those of the indices. The indices are not managed, and returns do not reflect the deduction of fees, expenses, transaction costs or taxes that actual client accounts are subject to. Investors cannot invest directly in an index. Returns are not annualized for periods less than1 year.
Trailing Major Index Returns and YTD S&P Sector Returns are sourced from Morningstar Direct.
* Sourced from JPMorgan Asset Management, publicly available at https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/
All other economic and market data sources may include, and is not limited to:
Edward Jones, publicly available at https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-marketweekly-update
Goldman Sachs, publicly available at https://www.gsam.com/content/gsam/us/en/advisors/market-insights.html
Rowe Price, publicly available at https://www.troweprice.com/personal-investing/resources/insights/global-markets-weeklyupdate.html