This Weekly Financial Markets Update reviews the top market headlines: Consumer Spending Powers Strong Q3 GDP Growth, Consumer Sentiment Slips Again in October, NASDAQ Composite Index Marks a Correction.

Top Three Market Headlines

Consumer Spending Powers Strong Q3 GDP Growth: The Bureau of Economic Analysis reported last week that real (inflation-adjusted) U.S. gross domestic product (GDP), a measure of all goods and services produced, jumped at an annualized rate of 4.9% in the calendar quarter ended September 30, 2023 compared to the prior quarter. This was the fifth straight quarter of positive GDP growth and represented a considerable acceleration from the 2.4% pace recorded in the second quarter. Q3 growth was keyed by strong consumer spending, followed by growth in private sector inventories and government expenditures.

Consumer Sentiment Slips Again in October: The University of Michigan last week published its latest Index of Consumer Sentiment, which registered a reading of 63.8 for October, down from 67.9 in September. This marked the third consecutive month in which consumer sentiment fell, and the index remained well below its 30-year average of 86.5. Consumers noted that inflation remains a key concern, as inflation expectations of survey respondents increased to 4.2% from 3.2% in the prior month. The report also highlighted that consumers' outlook on business conditions dropped 16.0% from last month.

NASDAQ Composite Index Marks a Correction: The tech-heavy NASDAQ Composite index entered into correction territory last week, closing at 12,643, down nearly 12% from its most recent high of 14,358 on July 19th of this year. Approximately half of that decline has come in the last two weeks, as the stocks of technology companies, which combined represent 58% of the index, have been pressured lately following disappointing earnings reports among certain high profile names in the sector. Last week alone, for instance, Alphabet (Google) endured a 10% decline while Meta (Facebook) fell 4%.

As of October 30, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.95% -4.11% 5.53% 10.04%
S&P 500 -2.52% -3.90% 8.66% 9.97%
Russell 2000 -2.60% -8.25% -5.91% -7.94%
MSCI EAFE -0.76% -4.19% 2.59% 13.49%
MSCI Emerging Markets -0.61% -3.41% -1.65% 9.88%
FTSE NAREIT -2.63% -6.52% -8.52% -6.46%
Bloomberg Commodity -0.07% 1.18% -2.31% -1.96%
Barclays U.S. Aggregate 0.68% -1.28% -2.48% 0.00%