“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”– Warren Buffet
September was a brutal month for equities. In fact, September saw the S&P 500 post its worst monthly performance since March 2020. Headwinds consisted of domestic and international political uncertainty, as well as an energy crunch that shook commodity markets.
In China, the Evergrande crisis led broader real estate markets lower. The company’s inability to pay back bond debt was a stark reminder to investors of the “too big to fail” establishments and brought back reminiscence of the 08’ crisis.
In the U.S., Washington continued to grapple over federal spending bills and the debt ceiling. Congress passed a ~$1.2 trillion spending package for infrastructure, however, the bill was delayed by progressive Democrats who lobbied for social and green programs as part of their broader agenda.
In late September, the Federal Reserve stated that it could begin tapering its monthly asset purchases in November. This news was anticipated and mainly priced into the market. This news has not had a material impact on interest rates, although they have pushed higher.
The 10-year Treasury ended the month of September with a yield near 1.48%. Since then, the 10-year has continued to climb.
To date in October, equity markets have continued their rebound, though daily trading remains volatile. In fact, U.S. stocks aren’t far from their all-time highs. We are continuing to monitor supply chain and labor market issues as they could provide the next catalyst for the broader equity markets.
Too often, we see negative headlines and market bears highlighting inevitable market crashes, however this market continues to prove that a consistent and disciplined investment strategy can lead to positive outcomes for investors.
Managing Partner, Hamilton Capital Partners, LLC