Q3 Market Recap (2023)
Today marked the end of Quarter 3 (Q3) 2023 for traditional markets. Third quarter performance of the major indices is as follows: the Dow Jones lost 2.65%, the Nasdaq fell 4.32%, and the S&P500 decreased 3.76%. This article will take a look into the major economic events of the third quarter, performance metrics, and other important topics.
Let’s first take a look at recent economic data releases in Q2. GDP data for Q2, which was released on August 30th, showed the US economy grew 2.1%. The US economy has grown for three consecutive quarters.
Inflation remains above the Fed’s goal of 2.0%. The latest report showed that inflation came in at 3.7% for August 2023. Inflation rose 0.6% in August, and September’s data will be released on October 12, 2023, at 8:30 a.m. EST and can be found here. The Fed has opted to pause rate hikes during their last meeting. At a minimum, there is an expectation that rates to remain high until inflation can be tamed. The current rate range is 5.25–5.50%.
The US unemployment rate has started an uptrend, moving from 3.6% to 3.8% throughout Q3. The latest report on unemployment can be found here.
Today, the Personal Consumption Expenditures (PCE) report was released. A change of 3.5% from one year ago is noted, The full report is available here.
This quarter featured strong earnings from most companies, with future outlooks also looking bright. AI-powered stocks, such as NVDA, had a slowdown this quarter, as growth concerns loomed. Analysts also questioned how far stocks like NVDA can run, as a possible AI bubble may be forming. The energy sector rose this quarter, following news that gas prices may rise once again. In addition, Russia announced an export ban on oil that may affect prices. Stocks like XOM (+10%), MRO (+16.30%), and others trading higher this quarter as a result. Other standout stocks included DELL (+34%), JBL (+22%), AMGN (+20%), and MAT (+20%).
Cryptocurrencies fell sharply this quarter. Bitcoin lost ~ 12% and Ethereum fell 13.42%. Bitcoin ETFs remain in central focus for the cryptocurrency community, as Greyscale scored a win against the SEC. Check out this article by Cointelegraph which provides an excellent recap. The SEC also announced it is delaying its review of BTC ETF applications for major brokerages including Blackrock, WisdomTree, and InvescoGalaxy, among others (The SEC has since delayed the ETF review multiple times). CoinDesk author Nikhilesh De provides a great outline of the SEC’s decision here.
As we look forward to Q4, markets are digesting a few key factors:
- AI is becoming more integrated with other technology; many earnings calls are mentioning AI more often.
- Inflation has begun to rise again, which could prompt higher rates, and rates may remain higher for longer.
- A government shutdown is looming, as lawmakers debate the next US budget.
All information in this article is for educational purposes only and is not to be considered financial advice. Do your own research and consult a financial advisor for advice.
Financial data provided by Google Finance.
