Gateway Financial Partners



November 2023 | Monthly Economic Update

Source: FactSet

Equities fell for the third straight month in October, giving back nearly half of their gains for the year. The prospect of higher for longer interest rate policies and elevated geopolitical uncertainty as a result of the Israel-Hamas conflict weighed on markets. In October, US equities fell into correction (a drop of 10% from its peak in the summer) but still led the pack among global regions. Regional economic challenges in China, along with weakness in their real estate sector and restrictions on AI chip exports, have sent emerging market equities into negative territory for the year.

Looking across equity sectors, defensive buying benefited utilities and was the only sector with a gain of 1.29% on the month. Energy saw the largest decline, falling 5.97% as slowing economies weighed on the sector. Comparing equity sizes and styles, larger stocks outperformed mid and small as investors sought safety amid uncertainty. Value was more favored within large companies, while growth was more resilient in mid and small.

Bonds broadly saw declines in October as yields pushed higher globally. The benchmark 10-year US Treasury yield crossed 5% briefly during the month – a first since 2007 before the Global Financial Crisis. Longer-dated bonds and lower-quality bonds, such as high-yield bond classes, fared worse.

Lastly, broad commodities were essentially flat, gaining 0.27% for the month. The tragic events that unfolded in the Middle East led to a flight to safety in gold. Oil prices also rallied amid concerns that an escalation into a wider regional conflict could disrupt oil supply, but fell towards the end of the month as concerns of an economic slowdown globally overtook sentiment. Real estate fell with a weakening economic backdrop, leading the index lower, with US REITs falling 3.2%.

Traditional balanced portfolios continued their struggle with the global 60/40 index blend down 2.3% in October. Diversifying alternative assets like commodities and gold saw positive returns, while traditional stocks and bonds detracted from performance.

Source: FactSet

The Monthly Riddle

What reordered word is a mistake?

LAST MONTH’S RIDDLE: What word can be added before or after these words to make a new word or phrase?

Break, Light, May

ANSWER: Day. Daybreak, daylight, may day.

Tip of The Month

Be cautious during Black Friday sales: often, the “lowest prices” may not be the lowest of the year, and the original price tags can be misleading. Watch out for special-run products, especially in electronics, which might be sold cheaper due to inferior components or missing features. For smart holiday shopping, track prices throughout the season, and remember that shopping outside of Black Friday might sometimes offer better deals.

Important Information
This is for informational purposes only, is not a solicitation, and should not be considered investment, legal or tax advice. The information has been drawn from sources believed to be reliable, but its accuracy is not guaranteed, and is subject to change. Investors seeking more information should contact their financial advisor. Financial advisors may seek more information by contacting AssetMark at 800-664-5345.

Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation.

It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Index performance assumes the reinvestment of dividends.

Investments in equities, bonds, options, and other securities, whether held individually or through mutual funds and exchange traded funds, can decline significantly in response to adverse market conditions, company-specific events, changes in exchange rates, and domestic, international, economic, and political developments.

Bloomberg® and the referenced Bloomberg Index are service marks of Bloomberg Finance L.P. and its affiliates, (collectively, “Bloomberg”) and are used under license. Bloomberg does not approve or endorse this material, nor guarantees the accuracy or completeness of any information herein. Bloomberg and AssetMark, Inc. are separate and unaffiliated companies.

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