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- The S&P 500 posted a 3.3% loss in Q3 2023
- The Case-Shiller 20-City Composite Home Price Index rose 0.6% in July versus the prior month
- The Consumer Confidence Index declined 5.2% in September
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Top Three Market Headlines
Financial Markets End Q3 in the Red: Most major financial market indices finished with losses in Q3, offsetting gains generated in the first half of the year. The bellwether S&P 500 index showed a -3.3% total return in Q3, its first negative quarter since Q3 2022, which left its year-to-date return at 13.1%. International stocks fared slightly worse, as the MSCI ACWI ex-US index fell 3.8%, pulling its year-to-date gain down to 5.3%. Bonds also struggled during the quarter (Bloomberg U.S. Aggregate index, -3.2%), impacted by rising interest rates. One of the few corners of markets gaining ground was commodities (Bloomberg Commodity index, +4.7%), which benefited from a nearly 30% surge in oil prices.
Home Prices Remain Resilient: Keyed by a limited supply of homes for sale, home prices in major U.S. metropolitan areas rose in July for the fifth straight month, despite higher mortgage rates and slower sales activity. According to the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index released last week, prices increased 0.6% in July versus the prior month, with 19 of 20 markets seeing gains. Compared to the prior year, prices in June were up 0.1%, an improvement from -1.2% in June. On a year-over-year basis, the largest gains were recorded in Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%), while the weakest trend was in Las Vegas (-7.2%).
Consumer Surveys Weaken: A pair of surveys released last week revealed greater pessimism among consumers in September. The Index of Consumer Sentiment, published by the University of Michigan, registered 68.1, down from 69.5 in August and well below the historical average of 86.0. Meanwhile, the Consumer Confidence Index, issued by The Conference Board, fell to 103.0 in September from 108.7. Notably, this report's Expectations Index, which reflects consumers' short-term outlook, fell nearly 10 points to 73.7, below the threshold of 80 that historically signals a recession within the next year. Across both reports, consumers pointed to rising interest rates and gas prices as key concerns.