December 5, 2023

The S&P 500 snapped a three-month losing streak, gaining 9.1% in November as interest rates declined sharply (best monthly performance for bonds since 1985).  The view that the Federal Reserve is done with its rate hikes was solidified this month as a cooler October inflation reading led to falling bond yields.  Stock prices moved higher in turn, likely to the upper end of the range, as investors also interpreted new economic data as continuing to show solid, albeit moderating growth.  All of these factors swirling together in investors’ minds have resulted in a growing consensus of a “soft landing” for the U. S. Economy. Equity performance also broadened out a bit from the “Magnificent 7” large technology stocks as mid-cap and small-cap stocks performed well.  Technology (+12.9%), along with the interest-rate-sensitive real estate (+12.5%) and financials (+10.9%) were the best performing sectors for the month.  Energy (-1.0%) was the only sector to register a loss in November.  From a style perspective, growth (longer duration assets than value stocks) outperformed value across the board.