October 2023 Review – Looking Ahead

The month of October ended with an upswing in the last two trading days. This carried over into November’s trading. The combination saw the S&P 500 up 6% last week. However, all of the market indices finished down for October.

The Technology sector was flat for the month. The Super 7 Technology names were mixed…On the downside were Tesla (-19.73%), Nvidia (-6.25%), Google (-4.97%) and Apple (-0.26%). On the upside were Microsoft (+7.08%), Amazon (+4.70%) and Meta (+0.35%). Utilities had a small uptick, though still the biggest laggard YTD. Energy had the worst performance for the month, down -6.1%. The remaining sectors all finished in the red for October.

S&P 500:                     
Oct  -2.20%               YTD  +9.23%
Oct  -1.36%                YTD  -0.28%
Oct  -2.78%                YTD  +22.78%
Russell 2000:           
Oct  -6.88%                YTD  -5.62%

Sector Performance YTD:

Communication Services  +36.6%
Consumer Discretionary  +20.0%
Consumer Staples  -7.9%
Energy  -3.0%
Financials  -5.8%
Healthcare  -8.5%
Industrials  +0.1%
Materials  -2.2%
Real Estate  -10.7%
Technology  +33.7%
Utilities  -15.5%

Current U.S. Treasury Yields:

6 Month Bill              5.45%
2 Year Note              4.96%
5 Year Note              4.59%
10 Year Note            4.65%
30 Year Note            4.82%

The Economy and the Fed:

In October, the IMF released its annual economic outlook and sees weakness across the world for the balance of 2023. The IMF notes continued high inflation, more central bank tightening, the Russia/Ukraine war, and China continued economic woes coming out of Covid. The Middle East conflict with Israel and Palestine can be added to the worry list.

Economically, the U.S. remains the strongest, while the U.K. and the Eurozone look headed for recession. Germany has continued to contract and should remain stagnant, while France grew 0.1% in October.

November kicked off with the Fed leaving rates unchanged at 5.5%. This helped to fuel the positive trading week. Powell reiterated that the Fed would stay data dependent, and the market rallied on the dovish non-action.

There is a pattern of deceleration in employment while overall still positive. Manufacturing and Construction are steady, Housing remains tight, and inflation has continued to ease. GDP came in at 4.9% as consumers continue to spend, although analysts believe that this level of spending can’t be sustained.

Money Market funds added $62.68 billion, continuing 2023’s accumulation trend and bringing the total invested to $5.70 trillion. The week ending November 1st reflected the highest inflows for Money Market funds since late March 2023. With yields generally around 5%, and the worry on the U.S. Treasury front, investors moved from Treasuries to Money Markets.

Looking Forward:

We believe that the market will continue to climb the “Wall of Worry” through year-end. 85% of the S&P 500 have reported Q3 earnings. Total earnings are up 2.2% from same period last year with 12.4% higher revenues. 71% of reporting companies have beat EPS estimates and 67% beat on revenues. Margins have been better than expected despite growth slowing. This sets up for a positive November and December.

Money Markets and U.S. Treasuries remain integral to our portfolio construction. As well, stock selection remains key and staying with solid balance sheet companies will reward. We still believe in the Santa Claus rally.


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Founded in 1976, Garrett Nagle & Company is a boutique investment management firm specializing in managing portfolios for high net worth individuals and institutions. Based in Woburn, Massachusetts, our portfolios are separately managed and customized according to each client’s individual risk tolerance and return objectives. The firm is a Registered Investment Advisor with the SEC.

Founded in 1976, Garrett Nagle & Company is a boutique investment management firm specializing in managing portfolios for high net worth individuals and institutions.


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