Market Conditions on the Road to Retirement

November 3, 2023

The weather turned unmistakably gloomy last month – at least in the markets. The S&P 500 finished down 4.9% in September4, making it the worst month of the year. The TSX, meanwhile, fell 3.7%.5  

There were many factors that contributed to the market’s malaise.  Here are just a few:

·       Thanks to natural disasters in Libya and supply cuts in SaudiArabia and Russia, oil prices rose to over $90 a barrel in September6, climbing to their highest level since November of 2022.7 This, in turn, drove gas prices higher.  

·       Because so many goods and services depend on oil/gas, the priceof these rose, too.  While inflation isstill down significantly from earlier in the year, consumer prices haveunfortunately been trending upward since June.  

·       Stubborn inflation – plus a surprisingly resilient economy – has convinced investors that interest rates will remain high for the foreseeable future. Furthermore, it’s quite possible we’ll see another rate hike sometime before the year ends.

·       In the United States, this realization has also caused a spike in bond yields, which are currently at their highest level in over a decade.This has made stocks less attractive to some investors.  

·       Concerns about the U.S. government shutdown, due to their legislature’s inability to pass the various spending bills required to keep the government open.  

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