Market Outlook - October 2023

In Canada and U.S., stocks were unable to shake off the weakness of the previous month and the S&P500 finished roughly 9% lower than its 2023 closing high on July 31st this year and marked the first 3- month losing stretch since early 2020. As we have said in previous monthly commentary’s we believe investors are overreacting to the stock market implications of higher interest rates. Although, geopolitical issues, political shenanigans and isolated U.S. regional banking closures have served to heighten investor nervousness this year, it does not change the fact that earnings results remain positive overall. The reality is that third quarter earnings were very good. A year ago, the talking heads were saying that major downward revisions to corporate earnings would be imminent. Yet here we are in at the end of October 2023 and no evidence of corporate earnings rolling over is present. In fact, the outlook for the US economy continues to improve and as we’ve said many times before, “as the US goes, so goes Canada.” While Canada is the real disappointment this year relative to the US market, we still firmly expect the market to rebound in the final two months of the year given what continues to be a resilient economic and corporate earnings backdrop.

This excerpt is taken from our October 2023 market commentary. If you would like to subscribe to our monthly commentary, please email us at mmbwealth@nbpcd.com