Market & Topical Perspectives

3Q23 Market Overview: A Riot of Red

3Q23 Market Overview: A Riot of Red

After a strong start to the third quarter, global equity markets wilted in the summer heat, eliciting sour memories of the “nowhere to hide” investment environment of 2022 in the process.

Key Takeaways

  • A broad swath of asset classes posted declines for the third quarter, as a selloff in long bonds weighed on risk assets globally.

  • Combined with generally supportive macro- economic reports, the latest Federal Reserve dot plot suggested the “higher for longer” narrative espoused by policymakers is closer to becoming a reality.

  • Troubling fiscal circumstances in the US may be impacting supply/demand dynamics in the Treasury market while also providing a source of support for the price of gold.

  • While the economy has been resilient, persistence is not guaranteed, and conditions likely could become more challenging as the accumulated impacts of policy tightening continue to reverberate. It may be a bumpy ride from here to the Fed’s terminal rate.

     

    1. Source: FactSet; data as of September 30, 2023.

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