Independent Advisor Alliance, LLC

CIO Monthly Observations - September 2023

Chris Zaccarelli |
Categories
Monthly IAA Commentary

Markets in Review

Stock markets fell in August, giving up ground, with the S&P 500 dropping -1.8% and reducing its year-to-date gains to 17.4%. The MSCI All Country World index also fell, down -3.0% for the month, which puts its year-to- date return at 13.3%. Bonds also dropped with the Bloomberg BarCap U.S. Aggregate Bond index losing -0.6% in August, which leaves its year-to-date return at only 1.4%.

Most of the Fed governors and Chairman Powell met at their annual gathering in Jackson Hole, WY to talk about the US consumer, future interest rate policy and other regulatory and economic topics. Although the chairman’s speech had some investors on edge, robust tech earnings – especially from the chips sector – helped to reduce some of the market’s losses. Meanwhile, overseas, China’s economy continues to struggle, which has weighed on global economic growth this year.

Monthly Highlights

 

 

The Federal Reserve chairman suggested that more rate hikes may be necessary Tech shares recovered some of their monthly losses because of demand for AI chips China’s economy continues to weaken

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article. Chairman Powell Says Higher Rates May be Needed

The Fed Chairman’s speech talked about the strength of the US economy and concerns that he and other Fed governors have that inflation will remain elevated as long as the economy remains resilient in the face of ever higher interest rates. However, he did say that the Fed would “proceed carefully,” which likely means that they may pause again in September and not raise interest rates immediately, but he still left the door open for further rate increases later this year.

Tech Storms Back as AI Chip Demand Surges

The S&P 500 dropped four days in a row heading into some influential tech earnings reports, but the positive news from some of the biggest chipmakers on the planet reversed the downward trend. One of the companies saw their stock jump 8% in a day and that helped the entire Nasdaq index to increase by 1.5%, stopping the pullback in its tracks.

China‘s Economic Woes Mount as Home Prices Fall

China’s economy had been expected to be a growth engine this year – now that they have removed most of their Covid restrictions – but so far it has been underwhelming. Home prices on average fell in the country for the first time in July and an index of the 35 smallest cities in China saw housing prices decline for a 17th straight month. The surprising weakness led many observers to predict that the government will begin taking steps to ease policy in order to contain the weakness in the property sector.

My Name is Barbie Oppenheimer, but Most People Think I‘m Joking

One woman whose name is a combination of the two biggest movies of the year – and a surprising cultural phenomenon known as “Barbenheimer” – has been enjoying the attention that comes with movie-goers enjoying both “Barbie” and “Oppenheimer” in the theaters. The Massachusetts woman has been hearing from college friends and those that know her unique name and was unable to pick a favorite when asked to pick which movie she liked better.

DISCLOSURES
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Blackbridge Financial are separate entities from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non- financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.
MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities.
Please note this newsletter contains hyperlinks to additional content. The information being provided is strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided by these websites.