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Q3 2023 Market and Economic Update

Q3 2023 Market and Economic Update

November 16, 2023

If you missed our October 27 webinar, watch the replay here.

Key Points

Economic Outlook:

  • The 2023 GDP outlook is turning out better due to labor market and household resiliency.
  • Inflation still elevated but continues downward glide path. Wages and service inflation are declining more slowly.
  • Fed likely at or near the end of its hiking cycle, but expected to remain higher for longer.
  • Recent increase in 10 year treasuries if sustained will impact consumer and corporate spending.
  • Expecting modest GDP growth in 2024.
  • Banks are reducing lending to consumers and businesses.

Investment Strategy:

  • Geopolitical risk and trade tensions remain elevated, highest risk to our forecasts and supports modest defensive allocation.
  • Volatility may create good buying opportunity in all but a worst-case scenario.
  • Likely first step to reach neutral equity exposure will be to focus on high-quality US stocks selling at reasonable valuations.
  • Continue to avoid European and Asian equities.
  • Recent sell-offs in bonds likely, creating a buying opportunity.
  • Maintaining focus on quality and below average duration.