Monthly Observations from CIO, Chris Zaccarelli

Christopher Demarest |
Categories
Market Commentary

Markets in Review

The S&P 500 fell -1.0% in October, breaking a long winning streak, but its year-to-date gains are still 19.6%. The MSCI All Country World index also fell during the month, losing -2.3%, reducing its year-to-date return to 14.5%. The Bloomberg BarCap U.S. Aggregate Bond index lost a lot of ground as well, dropping -2.5% on the month, leaving its year-to-date gain at only 1.9%.
The market finally started to show some pre-election jitters, falling for the first time in six months, but technology stocks were still able to power ahead, despite some mixed results from some of the largest tech companies. The Middle East continued to be a flashpoint with Israel and Iran exchanging missile attacks, while Iran’s proxies (e.g. Hezbollah and Hamas) tried to regroup after Israel dealt them huge losses. 

Monthly Highlights

  • The inflation data was higher than expected, but shouldn’t interfere with rate cuts
  • Middle East tensions remain high with Iran and Israel continuing to escalate
  • Most of the market has been struggling recently, but tech stocks have been bucking the trend

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article. 

US CPI Rises More Than Forecast, Stalling Inflation Progress

Although the Federal Reserve has already begun a rate-cutting cycle, they still need to see inflation come back down to their 2% target, so any inflation readings that slow down that progress could be cause for concern. The Fed will meet the week of the election and they are still likely to cut interest rates by another 0.25% on November 7th.

Israel Responds to Iran's Attacks

Israel finally responded with force, after Iran’s direct attacks earlier this month. In a surprisingly dominant display of air power, the Israels were able to fly close to 100 fighter jets into Iranian airspace, knock out most of their air defenses and return to base without a single casualty. It appears that Israel heeded the US requests to avoid oil fields and nuclear facilities, but those could be on the table if Iran chooses to escalate the situation by again attacking Israel again.

Nasdaq Rises to All-Time-High While the Rest of the Market Languishes 

Most of the large tech stocks (Nvidia, Meta, Amazon, Microsoft, etc.) have had a good month and an even better year, but not all of the stock market has been doing as well. Much of this year’s gains have been concentrated in the larger tech companies, and while some of those stocks have done better than others (NVDA and AMZN vs META and MSFT), they have all seen large increases in revenues and profits. 

America's 10 Scariest Roads Revealed 

Just in time for Halloween, a car dealership in Florida found a clever way to get some free marketing.Gunther Volkswagen in Delray Beach, FL surveyed 3000 drivers about which roads were the scariest in America and the real-life road from “The Legend of Sleepy Hollow,” topped the list, followed by 9 others in Arizona, Georgia, Iowa, Louisiana, Mississippi, New Mexico, and Oregon. 

DISCLOSURES

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This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non-financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.

MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage-backed and asset-backed securities.


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