Maple Capital Market Commentary: Read the Full Article
As of 10-31-2023
The Month In Review
Financial market performance in October was negative across the board. The Energy sector led the decline in the S&P 500 Index, while the Utilities sector posted a gain. The relative outperformance of a defensive sector like Utilities may reflect a resurgence of recession fears even though third quarter growth surprised to the upside. Bond yields also rose, more so for longer-dated bonds, which led to negative total return for the second month in a row.
The initial read of third quarter GDP was 4.9% annualized, propelled by strong consumer spending, government spending, and inventories. The residential investment category also posted a gain, its first increase since the first quarter of 2021.
Government bond yields rose in October as elevated supply from a growing deficit combined with only limited progress on inflation led to higher yields. Yields on longer term bonds rose more than short term bonds. Risk spreads on non-government bonds also moved wider, further reflecting the dismal sentiment.
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