Independence Wealth Advisors
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Large Cap Stocks rebounded from the previous quarter’s decline to finish the year in strong fashion. Technology stocks were the strongest contributors for the full year, the Q4 rally was more broad-based and inclusive of other sectors and smaller stocks. Long-term interest rates reached a peak in October, before reversing and sparking a rally in bonds.
Independence Wealth Advisors
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Stocks slumped in the 3rd Quarter as rising interest rates renewed recession concerns. The S&P 500 Index declined 3.3% for the three-month period but remains up for the year to date. Remarks from the Federal Reserve about keeping monetary policy tighter for a longer period sparked a sharp rise in long-term interest rates, with the benchmark 10-year Treasury closing at a 16-year high. Consumers felt the pinch of inflation at the gas pumps as crude oil prices soared to over $90 per barrel in September.
Independence Wealth Advisors
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Stocks posted gains through the 2nd Quarter of 2023 but there was a clear distinction in performance between large-cap technology stocks—which are benefitting from investor interest in anything related to artificial intelligence (AI)—and the rest of the market. As a case in point, the biggest companies in the S&P 500—Apple, Microsoft and Amazon—outperformed the broad market index for the quarter with gains of 19%, 20% and 28%, respectively. Bond yields inched higher early in the quarter, but were mostly flat in June as investors waited for Fed guidance on future rate increases.
Independence Wealth Advisors
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Stocks started 2023 on a positive note as the S&P 500 Index climbed 7.5% in the 1st Quarter, but the path to these gains wasn’t easy. After market momentum in January, investors turned fearful in February over rising inflation and higher rate hikes from the Federal Reserve. March brought more worry over the impact of rising interest rates on the banking system. But once the turmoil over regional bank failures lessened, stocks ended the quarter with a 3.7% gain in March as represented by the S&P 500 Index . Bond yields rose during the first half of the quarter, especially among shorter-term bonds, but finished lower on increasing recession concerns.
Independence Wealth Advisors
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The S&P 500 Index ended 2022 with a positive quarter as it rose 7.5%, but it wasn’t enough to turn around a terrible year for equities. Investors saw signs of optimism in easing inflation figures, raising the possibility of a slower pace of future rate hikes from the Federal Reserve. But by year-end, fears of recession weighed on investor confidence and market indexes. Bond yields rose to one-year highs in October but receded by quarter-end, a sign of growing investor concern about a potential economic slowdown in 2023.
Independence Wealth Advisors
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Despite a summer rally that lifted the S&P 500 out of bear market territory, stocks ended the 3rd Quarter down nearly 5% and back in a bear market. Inflation remained high throughout the quarter even with slight improvements since its June peak. Persistently high consumer prices pushed the Federal Reserve to enact two rate increases of 0.75 percentage points each during the quarter. Bond yields spiked to levels not seen in 10 years, with the benchmark 10-year Treasury yield hitting 4% in September before easing by quarter-end.
Independence Wealth Advisors
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Stocks declined in the 2nd Quarter with the S&P 500 Index falling into a bear market in June. Aggressive monetary moves by the Federal Reserve to counter rising inflation stoked investor fears of a recession, even with consumer spending and company earnings remaining relatively strong. Bond yields rose on Fed action and stock investors seeking relative safety, but ended the quarter down from recent highs.
Independence Wealth Advisors
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Concerns about the economy and uncertainty about geopolitical events rattled investors to start 2022. Stocks declined in January and February, then became more stable in March. The Fed raised interest rates for the first time in nearly four years and set expectations for continued increases through the rest of the year.
Independence Wealth Advisors
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The stock market ended the year with positive momentum, despite a spell of volatility in the 4th Quarter following reports of monthly inflation rising at a pace not seen in decades. Strong corporate earnings helped sustain the equity rally, although many firms struggled with ongoing supply chain issues and labor shortages. Long-term interest rates ended the period slightly higher but remained below their calendar-year peak.
Independence Wealth Advisors
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Stock markets hit some headwinds in the 3rd Quarter after rising earlier in the summer. Strong reports on economic growth and the return of business activity were countered by concerns over inflation and uncertainty in global markets, particularly China. The S&P 500 managed a small gain of 0.6% for Q3. Long-term interest rates closed higher following a late surge in September.