Market Commentary by Mitchell Wood, Larson COO

The Major Markets were awash in red once again last week. All five major markets closed lower with the greatest losses in the Nasdaq. However, the S&P 500 stalked closely behind as the index gave back over 2.5 percent. The drop in the S&P 500 caused the index to both fall below the 200-day moving average as well as log a 10 percent decline from the July 31st high. This placed the blue-chip index in technical correction territory. Tearing the S&P 500 apart, we see that the bloodshed was widespread. Only Utilities at the sector level managed to close positive. Meanwhile, Communication Services saw the greatest drop with Energy closely behind.

 

Major Markets		YTD as of 10/27/2023
	Nasdaq
	Dow Jones Industrial
	S&P 500
	MSCI World
	MSCI EM
	Russell 2000
	Bar US Agg Bnd

S&P Sectors		YTD as of 10/27/2023
	Comm. Services
	Cons. Discretionary
	Cons. Staples
	Energy
	Financials
	Health Care
	Industrials
	Info. Technology
	Materials
	Real Estate
	Utilities
		Agent/Broker Dealer Use Only

The Energy sector ghoulishly benefited from an initial price appreciation within the global Crude Oil market following the terrorist attack on Israel. That said, while things have continued to escalate in the middle east, overall crude oil prices have fallen after reaching a midmonth high. Moreover, the October high was still well below the September high around $94 a barrel.

Last week, the EIA reported that Crude Oil inventories rose unexpectedly.

The 1.4M barrel increase week-over-week was significantly higher than the 240k build anticipated. The glut in oil stockpiles was also attributed to an increase in gasoline reserves when a reduction was expected. This activity was viewed bearishly as oil producers continue to see per barrel profit slip away. In other economic news, earnings season has begun in earnest. There were over 900 companies that reported earnings last week with another 1400 reporting this week and the peak number of companies reporting next week. Last week’s communication performance was in large part due to misses in Alphabet/Google and Meta which fell 9.8 and 3.9 percent respectively. Last week also saw the release of Q3 GDP which came in hotter than expected at 4.9 percent, compared to estimates of 4.7 percent and the prior quarter’s Q2 result of 2.1 percent. Additionally, the 0.7 percent increase in the September Personal Spending numbers provided difficult data for the Fed which has been hoping to see additional signs of disinflation ahead of this week’s FOMC Meeting on Halloween and All Saints Day.

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The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices