In September, the financial markets experienced some turbulence, affecting both stocks and bonds. Bond market yields started to rise, causing concerns in the stock market over the past 4-6 weeks. Additionally, negative news about the possibility of a government shutdown, leadership issues in Washington, D.C., and worker strikes contributed to market uncertainty.

The third quarter ended on a weak note for all types of investments, as reported in the attached Market Review. Unfortunately, the positive momentum from the first half of the year didn’t carry over into the third quarter. While inflation showed signs of moderating, it remained above the Federal Reserve’s target of 2%, which led to the Fed maintaining a cautious approach to monetary policy.

During the summer, crude oil and gasoline prices surged. Job growth, although consistent, slowed down in the third quarter. The housing market also cooled off due to rising mortgage rates and limited available housing inventory. Most market sectors declined in the third quarter, with utilities, real estate, technology, consumer staples, and consumer discretionary sectors experiencing the most significant drops, while the energy sector saw a substantial increase of over 16.0%. (1)

At the end of the third quarter, all benchmark indexes declined compared to their performance in the second quarter. The Russell 2000, which is sensitive to economic changes, had the largest drop, followed by the Nasdaq, S&P 500, Global Dow, and Dow. (2) Rising interest rates affected bond prices, yields, and the U.S. dollar. Ten-year Government bond yields reached their highest level since 2007, while the U.S. dollar also strengthened.

WW Q3 Commentary

Source: Stockcharts

Mortgage rates rose to 7.31%, the highest in 23 years, due to the increase in the Federal Funds rate. (3) Unlike in the past, house prices were still rising alongside mortgage rates because demand exceeded available housing inventory. Oil prices reached nearly $91.00 per barrel, marking a 30.0% increase since June. The retail price for regular gasoline rose to $3.837 per gallon by September 25. Gold prices declined in the third quarter, nearing a seven-month low. 

At its September 20 meeting, the Federal Reserve’s forward guidance indicated a commitment to maintaining higher interest rates for a longer period than expected, which surprised and concerned the markets.

In summary, inflation is gradually decreasing, the economy remains robust with ample job opportunities, and corporate earnings are holding up. (4) However, the Federal Reserve’s commitment to higher interest rates is causing unease in the markets. These elevated rates will continue to pressure the interest rate-sensitive sectors of the economy, such as real estate and banks, and the Fed may not pivot until they break something.

Looking Ahead

To gain further insights into the remainder of 2023 and the outlook for 2024, we have invited Barry Knapp for a ZOOM webinar on November 1st at 3:30 PM. We encourage you to join to hear Knapp’s perspective and engage in an interactive discussion.

In September, we introduced Redtail Speak, which is an improved communication solution compared to our previous texting system. We hope you have accepted the Redtail Speak invitation and saved it on your phone to contact our team. If you have any questions, please don’t hesitate to call us or send a message.

As we enter the fourth quarter, it’s a good time to consider year-end tax planning. We are here to assist you, and we’ve provided a checklist below to help you address specific financial topics before the year ends:

Year-end Tax Planning Checklist:

  • Contribute to Retirement Accounts
  • Make Charitable Contributions
  • Consider “Stacking” Deductible Items in Alternating Tax Years
  • Make Annual Gifts to Family Members
  • Review Paycheck Tax Withholding Rates
  • Evaluate Capital Gains and Losses, Both Realized and Unrealized
  • Revisit Your Financial Plan and Refocus on Personal Goals
  • If investment values or taxable income are down, consider a Roth conversion of some or all your traditional IRA accounts.

We will continue to seek opportunities for capital losses to prepare for the upcoming tax season and adjust your portfolio based on the evolving investment landscape.

Your September portfolio reports are available in your eMoney vault. If you would like to discuss them or explore year-end tax planning opportunities that align with your goals, we are conducting reviews and would be delighted to have a conversation with you. You can call us or schedule a review at your convenience.

We look forward to connecting with you soon!


  1. Market Data (oil spot price, WTI Cushing, OK)
  2. U.S. Department of Commerce (GDP, corporate profits, retail sales, housing)
  3. Russell 2000, NASDAQ, S&P 500, Global Dow, & Dow – are unmanaged groups of securities considered to be representative of the stock market in general.
  4. FACTSET Earnings Insight Q3 Earnings Season Overview “The earnings outlook for the S&P 500 for the third quarter is less negative relative to recent quarters. The percentage of companies issuing negative earnings guidance is equal to the 10-year average. Overall, the index is expected to report a year-over-year decline in earnings in the third quarter for the fourth straight quarter. However, the estimated decrease in earnings for the third quarter would be the smallest decline during this four-quarter streak.  In terms of guidance, the percentage of S&P 500 companies issuing negative EPS guidance for Q3 2023 is equal to the 10-year average. At this point in time, 116 companies in the index have issued EPS guidance for Q3 2023, Of these 116 companies, 74 have issued negative EPS guidance and 42 have issued positive EPS guidance. The percentage of S&P 500 companies issuing negative EPS guidance for Q3 2023 is 64% (74 out of 116), which is above the 5-year average of 59% but equal to the 10-year average of 64%.”
Tim Waterworth

More about the author: Tim Waterworth

Tim is licensed as a Registered Representative with Kestra Investment Services, LLC, and an Investment Advisor Representative with Kestra Advisory Services, LLC. He holds himself to a fiduciary standard, which means he is obligated to put the best interests of his clients first.