Third Quarter 2023 Market Snapshot

Surging yields on longer-term government bonds interrupted the steady market rally that had so far characterized 2023. The Russell 1000, which had been up nearly 20% for the year just two months prior in July, saw its momentum slow, settling for a 13% increase. The shift was spurred by growing belief that the Federal Reserve might keep interest rates higher for longer, potentially eroding the attractiveness of riskier assets like stocks.

Second Quarter 2023 Market Snapshot

Stocks continued to advance, shaking off the bear market of 2022, as several potential market disruptions failed to materialize. Unexpected global banking sector issues, including the second largest bank failure in U.S. history, were quickly dealt with by U.S. and European regulators, stemming off a major credit crunch.

First Quarter 2023 Market Snapshot

Softening inflation, a budding banking crisis, and a strong overall economic picture caused investors to re-evaluate their expectations for future interest rates in the first quarter. As a result, many of 2022’s trends – of lower asset prices in general, investor preferences for value stocks over growth stocks, and the dominance of energy-related assets – reversed themselves.

Fourth Quarter 2022 Market Snapshot

A tepid fourth-quarter rally in both stocks and bonds helped cut losses to close out a frustrating year for investors. For the full year, both global stock and investment-grade bond market indices suffered double-digit losses, as stock/bond diversification failed to meaningfully protect portfolios. A traditionally diversified portfolio of 60% stocks and 40% bonds suffered the fourth worst drawdown in the last century, measured in both real and nominal terms.