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Week in Review: Oct.16.2023 - Oct.20.2023

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October 23, 2023

Market Recap


The S&P 500 index fell 2.4% last week, ending its October weekly winning streak and putting the market benchmark into the red for the month, as comments by Federal Reserve Chair Jerome Powell raised investors' concerns about rate policy. The S&P 500 ended the week at 4,224.16, down from last Friday's closing level of 4,327.78. This marks the index's first weekly decline since the last week of September. It's now down 1.5% for the month to date but still solidly in positive territory for 2023 with a year-to-date gain of 10%.

The drop came as the Fed's Powell said the central bank's policy-setting committee may have to increase its policy rate more if the economy persistently grows at "above-trend" rates or labor market conditions don't continue to soften, though the committee will be "proceeding carefully" depending on incoming data.

The comments spooked investors at a time when they have already been on edge about future rate policy, especially as some companies' Q3 financial results have been weighed down by increased expenses.

The real estate sector had the largest percentage drop for the week, down 4.6%, followed closely by a 4.5% decline in consumer discretionary. Other decliners down by at least 3% each included technology, materials and industrials.

Still, two sectors managed to post weekly gains -- consumer staples and energy each added 0.7%.

In the real estate sector, shares of Crown Castle (CCI) fell 8.9% on the week as the company, which owns, operates and leases cell towers, reported Q3 adjusted funds from operations below analysts' mean estimate as revenue also missed expectations.

The decliners in consumer discretionary included shares of Tesla (TSLA), which tumbled 16% as the electric vehicle manufacturer reported weaker-than-expected Q3 results. The miss came as Tesla's margin more than halved year over year amid higher costs and reduced vehicle prices.

On the upside, the gainers in consumer staples included Dollar Tree (DLTR), which received an investment rating upgrade to buy from neutral from Goldman Sachs. Shares of Dollar Tree climbed 2.4%.

This week, the market will receive earnings reports from a number of heavyweight companies including Microsoft Corp. (MSFT), Google parent Alphabet Inc. (GOOG, GOOGL), Visa Inc. (V), Coca-Cola Co. (KO), General Electric Co. (GE), Facebook parent Meta Platforms Inc. (META), International Business Machines Corp. (IBM), Boeing Co. (BA), Automatic Data Processing Inc. (ADP), Amazon.com Inc. (AMZN), Mastercard inc. (MA), Merck & Co. (MRK), Intel Corp. (INTC), United Parcel Service Inc. (UPS), Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).

Investors will also keep a close eye on economic data, with October employment numbers due this week. ADP's report on private sector employment for October is expected on Wednesday, followed by weekly jobs data on Thursday and October nonfarm payrolls and unemployment on Friday.

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