Monthly Market Update (March 2023): 3 Things You Need to Know
Despite the banking-sector turmoil seen in March, the S&P 500 rose in March, helped by strong returns from growth stocks that were buoyed by falling bond yields. Here are 3 things you need to know:
The Federal Reserve continued to hike interest rates by 25 bps in March bringing the Federal funds rate range to 4.75% to 5.00%. U.S. Fed Chair Jerome Powell admitted, the current bank stress will tighten credit, with the result being “the equivalent of a rate hike or perhaps more than that.”
Technology led the advance, with the Nasdaq Composite ending up 6.69% in March and 16.77% in the quarter, its best showing since 2020’s second three months.
In the Financial sector of the S&P 500, 14 of the 65 stocks were up and 51 were down, with two regional issues going into receivership (SVB Financials and Signature Bank), as one regional declined 89% for the month (First Republic Bank). Banking issues, at this point in time, do not appear to be systemic, but withdrawals may lead to more failures.
The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).
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