Broker Check

October Market Outlook

October 13, 2022

WHERE WE WERE

September is historically a rough month for the stock market, and this year was no different. Fears of rising interest rates, high inflation, and downgrades in analyst earnings estimates have continued to shock equities and impact the American consumer. The S&P 500 was firmly in bear market territory at the end of September, down nearly 24% on the year. As we grapple with an economic slowdown, the housing and labor markets have shown signs of resilience, while a looming European energy crisis and war in Ukraine weigh on markets globally.

The US Dollar is still the strongest it has been in 20 years. As it strengthened, other currencies, such as the pound, weakened. The interest rate hikes are pushing up the dollar’s value, but countries from Europe to Asia to Mexico have seen their currencies plunge. Despite numerous headwinds, the US labor market remains robust, with few signs of slowing down.

WHERE WE ARE GOING

The Fed has continued to maintain its stance against inflation despite the concerns that further rate hikes could send us into a recession within the next year or so. News from early this month that the Bank of England would be purchasing bonds to bring ease to their struggling economy sparked a short-lived rally in domestic markets, but the rally could not be sustained, and we fell to a new low for the year.

We are not going to pretend that we know when the low will come, but historically, getting out of the market at or near lows has caused many to miss out on the recoveries that follow.

ADDITIONAL THOUGHTS

These markets aren’t for the faint of heart, which is why sticking to your plan is crucial. As always, mitigating your portfolio concerns is our priority. We always look at performance from multiple lenses because no specific time period can paint the entire picture. Patience and discipline are key during markets such as this one. Please don’t hesitate to reach out to discuss the current market, your investment portfolio, or your overall financial plan.

Sources:

Data from The Wall Street Journal

https://www.nytimes.com/live/2022/09/21/business/fed-interest-rates-inflation

https://www.morganstanley.com/im/en-us/individual-investor/insights/articles/market-pulse-with-jim-caron-20220926.html

https://www.morganstanley.com/im/en-us/individual-investor/insights/articles/inflation-may-be-peaking.html

https://www.morganstanley.com/im/en-us/individual-investor/insights/articles/market-pulse-with-jim-caron-20220921.html

https://www.wsj.com/podcasts/the-journal/the-pros-and-cons-of-a-strong-us-dollar/20ab6b53-95c5-4c25-95eb-f755e9300bf7´╗┐

Disclaimer:

BNY Mellon | Pershing is our clearing and custody provider. Olistico Wealth, LLC, a registered investment adviser. Pershing and Olistico Wealth, LLC are separate, unaffiliated companies, not responsible for each other’s services or policies. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. Past performance is no guarantee of future results.