Hello, this is James Mayer, Branch Manager, from the Huffman Mayer Wealth Management Group of Wells Fargo Advisors. October is over and we are sick of candy and ready for the savory foods of November. We are grateful that you are tuning in to see October edition of “the Market Recap”. Let’s see what key topics Phil has for us.
PHIL: Thanks James!
· Through October 18th, the S&P 500 had returned 13.8% for the year-to-date period. That said, those positive returns have disproportionately come from a few stocks that make up a large percentage of the index AND which have had very positive returns so far in 2023. The equal-weight S&P 500 has returned -0.3% over the same period. That gap between cap-weighted and equal-weight indices is the largest since 1998, according to a recent report from Renaissance Investment Management.1
· We frequently get questions from clients on the impact that wars will have on investment markets. The answer to these questions is always complicated, and while the current situations in the Middle East and Ukraine are tragic from a humanitarian point of view, each of the areas involved is relatively small from an economic perspective. Taken together, Ukraine, Russia, Israel, and the West Bank & Gaza areas account for about 2.5% of global GDP according to Data from the World Bank, with Russian and Israel accounting for the vast majority of that total. Using U.S. analogies for each area’s GDP, Russia’s economy is between the size of New York2 and Florida, Israel’s economy is slightly larger than Colorado’s, Ukraine’s is roughly the size of Nebraska, and Gaza and the West Bank are slightly smaller than the Greater Youngstown- metropolitan area.
· Halloween ranks 7th among the holidays for total U.S. consumer spending, but the category has seen explosive growth in recent years. After slight declines in 2019 and 2020, spending rose 27% in 2021, and is expected to grow an additional 15% to $12.2 billion by the U.S. Retail Federation in 2023.
SOURCES:
1. Renaissance Investment Management, “Market Update – The Magnificent Seven”, October, 2023.
2. U.S. GDP data from the Bureau of Economic Analysis
In Summary: The standard S&P 500 is up 13.8% through 10/18/23, but the equal weight version, where every stock counts the same is down 0.3% for the same period. The impact of wars on the economy are complex and sometimes hard to predict. The direct impact of the fighting in Ukraine and the Middle East is currently small, at about 2.5% of global GDP. Halloween is the 7th largest U.S. holiday for spending, and consumers are expected to lay out $12.2 billion on related spending this year.
Now let’s see what James & Ryan have to say about November.
JAMES: Thanks Phil. Election Day is near, and we hope you all have registered and are ready to get out to the polls to vote. According to the Census Bureau in 2013 there is only 56% of people who always or sometimes vote in local elections. We are hoping there is a better outcome this year!
Apart from Elections being in November we also have the great Thanksgiving Day!
RYAN: Yes Thanksgiving is on of our offices favorite holidays because we like to express our gratitude for your support and trust in us as your financial professionals.
We hope that you have a wonderful time with your family this Thanksgiving. Our team is thankful for your continued support!
We always want to talk with you. If you feel you know someone who would enjoy this video please feel free to send them the link.
As always stay happy, safe, and healthy and hopefully we will see you very soon.