August Market Commentary

August 2023 Market Commentary & Outlook

August kicked off to a disappointing start with Fitch Ratings downgrading the US Government’s credit rating from AAA to AA+, citing rising debt and repeated debt-limit political standoffs as part of their reasoning.  Fed Chair Jerome Powell did not rule out further rate hikes to cool inflation in his speech at the Fed-Sponsored Jackson Hole Symposium, and the 10-year treasury yield reached its highest level since November 2007 before easing to end the month.  Despite this, the broad bond market was flat for the month.

US Stocks declined in August, with the Russell 3000 index posting its first negative month since February. Corporate earnings of S&P 500 firms beat expectations but declined for a third consecutive quarter. However, core CPI rose at its slowest rate since October 2021.  Weak economic data to end the month fueled optimism that the Fed may be done raising its benchmark interest rate, leading US stocks to finish the month strong, but not strong enough to get out of the red.

International equities were down as well amid worrying economic news from China.  Concerns of China’s weakening economic outlook seeping into other areas of the global economy, eurozone inflation remaining persistently high, as well as more turmoil in Russia contributed to the pullback.  Despite a lackluster August, both domestic and international equities have performed strongly over the year to date and trailing year.

Index PerformanceAugustYear to DateTrailing 12 Months
US Stocks (Russell 3000)-1.93%18.01%14.76%
Foreign Stocks (FTSE AW ex US)-4.29%9.14%12.39%
US Bond Mkt. (BBgBarc Int. Gov/Cred)-0.01%1.75%0.55%
Cash (ICE BofA ML 3-Mo T-Bill)0.45%3.13%4.25%


There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Source: FMG Suite, LLC.
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