- Market News: US stocks had their worst month of the year in September and Q3 was the first negative performing quarter since Q3 2022. This pullback came in response to the Fed’s message that interest rates are set to stay higher for longer than previously anticipated. The S&P 500 and Nasdaq were down -3.3% and -3.9% for the quarter.
- Small Caps: The Russell 2000 fared even worse, down -5.1% for the quarter as health care, telecom, and utilities were all down double digits. The small cap index is down almost -11% from its peak at the end of July.
- Energy: Oil prices surged close to 30% during the quarter. As a result, commodities had their strongest quarter since Q1 2022 and Natural Resource equities were among the top performers for Q3.
- Bonds: While the short end of the treasury yield curve moved very little during the quarter, the long end moved substantially. The 10-year treasury yield jumped almost +75 bps during Q3. As a result, bonds (other than high yield) were negative for a second straight quarter.
- Currency and Foreign Stocks: The U.S. dollar climbed over +4% the last two months, dragging down returns of international equities for U.S. domiciled investors. In local currency terms, the MSCI EAFE Index dropped less than -1%, however, in USD terms, fell approximately -4%.
Past Performance Is No Guarantee of Future Performance. Any opinions expressed are current only as of the time made and are subject to change without notice. This report may include estimates, projections or other forward-looking statements, however, due to numerous factors, actual events may differ substantially from those presented. The graphs and tables making up this report have been based on unaudited, third-party data and performance information provided to us by one or more commercial databases. Additionally, please be aware that past performance is not a guide to the future performance of any manager or strategy, and that the performance results and historical information provided displayed herein may have been adversely or favorably impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be inferred that these results are indicative of the future performance of any strategy, index, fund, manager or group of managers. While we believe this information to be reliable, Pathstone bears no responsibility whatsoever for any errors or omissions. Index benchmarks contained in this report are provided so that performance can be compared with the performance of well-known and widely recognized indices. Index results assume the re-investment of all dividends and interest. Moreover, the information provided is not intended to be, and should not be construed as, investment, legal or tax advice. Nothing contained herein should be construed as a recommendation or advice to purchase or sell any security, investment, or portfolio allocation. Any investment advice provided by Pathstone is client specific based on each clients’ risk tolerance and investment objectives. This presentation is not meant as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s accounts should or would be handled, as appropriate investment decisions depend upon the client’s specific investment objectives.
U.S. Large Cap Equity is represented by the S&P 500 Index, with dividends reinvested. U.S. Small Cap Equity is represented by the Russell 2000 Index. Developed Non-U.S. Equity is represented by the MSCI EAFE Index. Emerging Market Equity is represented by the MSCI EM Index. Real Estate is represented by the S&P Global Property Index. Commodities are represented by the Bloomberg Commodity Index. Natural Resource Equities are represented by the S&P North American Natural Resources Index. U.S. High Yield Debt is represented by the Bloomberg Barclays U.S. Corporate High Yield Index. Emerging Market Debt is represented by the JPM GMI-EM Global Diversified Index. U.S. Aggregate Bonds is represented by the Bloomberg Barclays U.S. Aggregate Bond Index. U.S. Treasuries is represented by the Bloomberg Barclays U.S. Treasury Index. U.S. Municipal Bonds is represented by the Bloomberg Barclays Municipal 1-10yr Index.