August 2023 Market Review & Commentary
I hope you are as excited as I am for cooler temperatures coming soon (I hope... fingers crossed). As you all know, the fall season is by far my favorite time of the year, as I look forward to our annual family excursion up to Maine in October. This year, we will be beginning the trip in Burlington Vermont which has always been a favorite place of mine. Because this will be Channing's first exposure to Vermont, I am hoping he enjoys Lake Champlain that I have come to love.
I would be amiss if I did not mention the events of this date 22 years ago. Kim & I were just beginning our post college life together and Kim was just arriving in England via a New York City flight. This day shook me as everyone’s lives would be changed forever. My thoughts go out to every person affected by this day, and we are all forever changed. This day always makes me pause to remember that every moment should be cherished.
August Market Review:
Traditionally August is the weakest month for the markets and after having a nice run up through the first half of the year, this was the perfect time for the markets to have a slight pullback or pause. The month began with increasing bond yields, a downgrade of US Debt and news of China slowdowns which all brought downward pressure on the overall indexes. We saw the Utilities sector finish the month down -6.61% along with Consumer Staples sector get hit hard, finishing down -4.47% for the month. The markets found some footing towards the latter part of the month with the outcome of the Economic Outlook Symposium meeting as the outcome language was a “proceed cautiously” on further rate moves. I think every investor believes that we are near the end of the tightening cycle, and we all continue to watch the always delayed economic impacts of these already historical interest rate moves. So, hearing the Fed Chair and world economic leaders acknowledge a more cautious tone brought enough calm to the markets for them to minimize the August damage. The DOW Industrial finished the month down only -2.36% and the Nasdaq, which has been flying high this year, pulled back -2.17%.
In September we will be watching for the tone and activity coming from the Federal Reserve meetings ending September 20th along with the GDP & Inflation data news which will provide some potential insights of the real effect that rate moves might be having on the overall economy. A calm or unexciting September might be a “win” for the markets in this stage of the cycle.