Broker Check

November 2023 Investylitics

Horizon Advisor Network Investment Committee November 6, 2023

Executive Summary

  • The stock market fell into correction territory, dropping more than 10% from its July peak. From a technical standpoint, stocks also fell below their psychologically important 50-day and 200-day moving averages, before rebounding sharply last week.

  • The Federal Reserve Bank did not raise interest rates for the second consecutive meeting, citing progress on its inflation goals. They state that they will remain vigilant and could raise interest rates further if progress toward their 2% inflation target stalls.

  • GDP grew 4.9% in the third quarter, a faster pace than expected. However, the lagged effect of higher interest rates, more restrictive bank lending, and consumers running through their stimulus-boosted pandemic savings will eventually cause the economy to slow.

  • On October 7th, the world was shocked by the brutal attack of Israel by Hamas from the Gaza Strip, in which more than 1400 Israelis were killed. While our primary focus should be the humanitarian side of this conflict, many clients are questioning how military conflicts have historically impacted financial markets.

  • With interest rates on bonds at their highest levels in nearly 20 years, there is an opportunity for the bond side of a diversified portfolio to produce constructive returns as the Fed nears the end of its interest rate increase campaign.

The Horizon Advisor Network Investment Committee met on the afternoon of November 6th. We were happy to have the opportunity for our members to share their investment research and observations in light of recent economic news and geopolitical events influencing the economy and the markets.

After hitting a 2023 peak of just over 4600 at the end of July, the S&P 500 fell 11% in late October to just above 4100. This level was last seen in late May, as the government debt ceiling issues were still being negotiated. As you can see in the chart below from our friends at JP Morgan Asset Management, intra-year volatility is nothing new. As a matter of fact, the stock market has averaged an annual intra-year drop of 14.3% since 1980.

Subsequently, markets have rebounded quickly and made up approximately 2/3 of the loss experienced over the previous three months. From a technical standpoint, the market has bounced back above both its psychologically important and closely watched 200-day and 50-day moving averages. We will be watching closely to see if the market has enough momentum to continue through the substantial resistance that exists at the 4500–4600-point range, as we continue moving through the seasonally strong fourth quarter.

Although the Fed continues to talk a tough game against current inflation levels, as well as the future path of inflation to their 2% target level, they did not raise interest rates in November for the third time in four meetings. The Fed says that they will remain diligent as they watch future data to make sure things continue on the right path. They are hopeful that rents and energy prices will come down. However, we know that wages have continued to rise, and will be impacted further by negotiations, such as the settlement of the UAW strike.

GDP continues to show significant and surprising consumer spending strength despite rising costs. Most economists agree that the 4.9% preliminary GDP number that we saw in the third quarter will likely be the high point for the economy. It is expected that the lagged effect of rising interest rates, tighter bank lending standards, shrinking consumer savings, and the restart of student loan payments will put a cumulative dent in future growth numbers.

On October 7th, the world was shocked by the brutal attack on Israel by Hamas from the Gaza Strip, in which more than 1400 Israeli citizens, mostly civilians, were killed. While the humanitarian side of this conflict, on people from both sides, should be our primary concern, many clients are questioning how military conflicts have historically impacted financial markets. 

Below, you can see that since the Cuban Missile Crisis in the early 1960s, markets have historically done well in the twelve months following the beginning of a military conflict. The two notable exceptions are the 1973 Yom Kippur War, which led to the Arab Oil Embargo and a significant recession in the United States. As we are much more energy independent today, we do not believe this risk is as prevalent as it was 50 years ago. The second significant period was after the September 11th Attacks. It is important to remember that the bubble had already burst, and the economy was already slowing at that time. 

Of course, each event is different and has its own unique set of circumstances. However, we wanted to show you that a military conflict in and of itself is not a reason to change your investment strategy or go running for the exits.

Finally, we wanted to remind you that with bond yields at the highest level they have been in nearly 20 years, the future returns on the fixed-income portion of your portfolio could be more additive than it has been in recent memory. We know that the Fed is near the end of its rate tightening cycle, if they are not already done. Our final chart below shows how results have faired in the one-year and five-years following the Fed's final rate hike.

After Fed hikes ended, long-term results outpaced cash, with the first year contributing most.

Sources: Capital Group, Morningstar. Chart represents the average returns across respective sector proxies in a forward extending window starting in the month of the last Fed hike in the last four transition cycles from 1995 to 2018 with data through 6/30/23.

The committee appreciates your trust and support. We continue to watch current events and diligently review current economic indicators and market history to make certain that we are managing your hard-earned resources responsibly. As always, if you have questions about your family’s unique situation or needs, please reach out to your financial advisor. We are here to help.

© 2023 Jesse Hurst

The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.


Jesse Hurst - Chair, Impel Wealth Management

Nathan Ollish - Impel Wealth Management

Clint Gautreau, Horizon Financial Group

Kevin Myers, ATL Global

Joy Schlie, FHT Financial Advisors

Dusty Green, Spencer Financial Inc.


Jesse W. Hurst, CFP®, AIF®
Financial Advisor

*Award Recipient Jesse Hurst 

*The 2021 ranking of the Forbes’ Best–in–State Wealth Advisors1 list was developed by SHOOK Research and is based on in–person and telephone due–diligence meetings to evaluate each advisor qualitatively and on a ranking algorithm that includes client retention, industry experience, review of compliance records, firm nominations, and quantitative criteria (including assets under management and revenue generated for their firms). Overall, approximately 32,725 advisors were considered, and 5,000 (approximately 15.3 percent of candidates) were recognized. The full methodology2 that Forbes developed in partnership with SHOOK Research is available at

1 This recognition and the due–diligence process conducted are not indicative of the advisor's future performance. Your experience may vary. Winners are organized and ranked by state. Some states may have more advisors than others. You are encouraged to conduct your own research to determine if the advisor is right for you. 

2 Portfolio performance is not a criterion due to varying client objectives and lack of audited data. SHOOK does not receive a fee in exchange for rankings.