Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important trends for advisors and their clients in this monthly market review. As always, feel free to download and share any visuals with clients and colleagues, or on social media.
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August 2023 Market Summary
Stocks took a breather in August as the S&P 500 fell 1.6%, the Dow Jones Industrial Average slipped 2.0%, and the NASDAQ ended 2.1% lower. It was a disappointing month globally–EAFE sank 3.8% in August and Emerging Markets tumbled 6.1%. Nonetheless, August didn’t subtract too much from the upbeat year-to-date performance of major US indices. The NASDAQ is still up 34.1% in 2023, the S&P 500 is 17.4% higher, and the Dow 4.8%.
Energy was the only US stock sector that posted a positive return in August, up 1.6%. Utilities was the laggard of the remaining ten sectors, down 6.1%.
US Treasury yields were largely flat in August, echoing the rather muted performance from equities. The 3-Month Treasury Bill remains the highest-yielding US treasury instrument at 5.56%, and the 10-Year is the lowest at 4.09%. In global fixed income, the yield on Japan’s 10 Year Government Bond rose by 5 basis points to 0.66%.
If you invested $10,000 into NVIDIA at its IPO back in January of 1999, that investment would be worth over $6 million today. NVIDIA’s annualized return of nearly 30% (60,070% total) dwarfs even the widely respected performances of the NASDAQ, S&P 500, and even the Technology Sector (XLK) since 1999.
After dipping below 3% for the first time in over two years, Inflation inched higher in July to 3.18%, up from 2.97% in June. Core Inflation did fall in July to 4.65%. The US Consumer Price Index rose a slight 0.17% in July, while MoM US Personal Spending rose at a higher MoM clip for the second straight month to 0.79%. The last action taken by the Federal Reserve was raising the benchmark Target Federal Funds Rate by 25 basis points to 5.50% at its July 26th meeting. This was the 11th rate hike in the Fed’s last 12 meetings.
The price of Gold fell 2.8% in August, up from $1,970.70 to $1,915.50. Oil prices were mixed in August; the price of WTI per barrel slipped 1.4% to $80.65 while Brent inched 0.2% higher to $85.42. The average price of regular gas rose 1.6% in August despite the mixed data, up 6 cents per gallon to $3.93 as of month’s end.
Crypto assets pulled back further in August. The price of Bitcoin slumped by 6.8% to $27,297 as of August 31st, and Ethereum dropped by 8.4% to $1,705. Nonetheless, 2023 has been a solid rebound year for crypto. Bitcoin is up 64% and Ethereum is 41.9% higher.