Quarterly market outlook - 3rd Quarter, 2023
Our investment strategists provide the Edward Jones perspective on the latest economic activity and what it may mean for investors.
The Quarterly Market Outlook provides investors with our perspective on recent activity in the capital markets. The Edward Jones Investment Policy Committee offers its viewpoints on the U.S. economy, equities, the bond market, international markets and asset classes, as well as a special topic of interest to investors each quarter.
These aren’t short-term predictions. Rather, this is Edward Jones’ perspective on market and economic topics designed to help you make decisions affecting your long-term financial strategy. As you read through each topic, you'll find specific actions you can discuss with your financial advisor.
Looking back at the 2nd quarter
U.S. large-cap stocks were the best performing equity asset class in Q2, driven by lower inflation and a possible end to central bank interest rate hiking cycles. Bond returns were more muted due to upward pressure on interest rates.
Economic outlook
We think inflation will continue to moderate, supporting the end of the BoC’s hiking campaign. However, growth is likely to downshift as the impact of the bank’s rate hikes filters through the economy.
Equity outlook
Overall, the equity markets in the U.S. and Canada have remained resilient through the first half of the year. We recommend investors remain neutral in U.S. and Canadian equities for now, staying close to their long-term strategic allocations.
Fixed-income outlook
After more than a year of aggressive monetary policy tightening, the second half of 2023 should bring the end of the Bank of Canada’s and U.S. Federal Reserve’s rate-hiking cycles.
International outlook
The international equity markets have had mixed performance over the past quarter. We remain neutral on international developed and emerging market stocks in the near term but see pockets of opportunity emerging.
Cash is back, but is it truly risk-free?
The Bank of Canada’s aggressive rate hikes to tame inflation have led to a sharp increase in borrowing costs to slow the economy. But this has also created a great environment to generate income. What are the risks and rewards of cash?
Strategic asset allocation guidance
Our Strategic Asset Allocation represents our view of balanced diversification for the fixed income and equity portions of a well-diversified portfolio based on our outlook for the economy and markets over the next 30 years.
Quarterly market outlook - Full report from Edward Jones
Download the entire quarterly market outlook report here.