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Monthly Market Update - November 2023

November 07, 2023

Last month was an uncomfortable reminder of the market turbulence experienced in 2022, and a disturbing start to another armed conflict in the world. In this piece, we briefly summarize October in the market and economy, and survey the potential rewards and risks ahead.

Bonds and stocks fell simultaneously, spurred by expectations of restrictive global central bank monetary policy amid economic strength. Geopolitical risk is high on several fronts, including the new war between Israel and Hamas. The month provided new information to update our short-term and long-term expectations.


Both US and international stocks declined slightly during the month, 2% to 4%, depending on the index [1]. Major bond indices also fell, with the Bloomberg US Aggregate and the FTSE Non-USD World Government Bond indices losing 1.58% and 1.02% respectively [1].

Let’s talk about interest rates…again. Inflation expectations and central bank response took center stage once more last month. Market participants expect the Fed Funds target rate to stay at or above its current level for longer [2] to fight inflation, and the Japanese 10-year government bond yield surged [3]. Commodities outperformed by delivering small positive returns [4], benefitting from renewed inflation focus.


Economically, most major countries are expected to continue growing [5]. The US economy is doing well, although certain metrics hint at an upcoming recession, such as consumer sentiment [6]. In the Euro Area, data showed falling inflation [7], which may reduce the need for high interest rates. The situation in “emerging markets” is complicated; although they are growing rapidly, the dominant country in this group, China, has economic imbalances and US geopolitical competition that hinders investment [8].

Global Conflicts

The erupting war between Israel and Hamas, intensifying US-China rivalry, and continued conflict in Ukraine could create headwinds for a variety of investment assets. We believe these risks are significant, but much international pessimism is already incorporated into today’s prices. For example, the top seven US individual tech stocks are equal in value to the top seven Asian entire country stock markets [9].

Looking ahead

Today’s investing risks seem easy to identify – they SEEK YOUR ATTENTION in major news publications: global conflict, sovereign debt levels, unsustainable interest rates, inflation, market fragility, etc. We identify and plan for these risks, and for ones that are not mentioned, but we rarely agree with the media on their asserted high probability and severity.

Instead, we believe the most likely risks are mundane: asset classes become too expensive and subsequently decline, or risk sentiment wanes temporarily and stocks move lower. At present, we are mildly pessimistic on US stocks due to above average valuations [10], mildly optimistic on bonds due to higher yields, particularly interested in unloved areas such as commercial mortgage-backed securities (CMBS), and neutral on the rest.

In addition, we strive to identify investments that work together to deliver competitive return per unit of risk, and we believe we can find these opportunities in any environment.

Interested in discussing the markets and your portfolio? Contact us, we’re here to help.

1 Invesco: Markets Review At-a-Glance, Ended 31 October 2023

2 CME FedWatch Tool, as of 1/2/2023,

3 Trading Economics: Japan 10 Year Government Bond Yield,

4 Morningstar: iPath® Bloomberg Cmdty TR ETN (DJP), +0.50% total return, October 2023

5 International Monetary Fund: World Economic Outlook, October 2023,

6 Advisor Perspectives: Consumer Confidence Declines for Third Straight Month Despite Continued Spending,

7 Trading Economics: Euro Area Inflation Rate,

8 The Wall Street Journal: Foreign Firms Pull Billions in Earnings Out of China,

9 Franklin Templeton: International Equities— A Compelling Diversification Opportunity,

10 J.P. Morgan: Guide to the Markets, 4Q 2023, slide 5,


The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not consider any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. This communication may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

Generally, among asset classes, stocks are more volatile than bonds or short-term instruments. Government bonds and corporate bonds have more moderate short-term price fluctuations than stocks, but provide lower potential long-term returns. U.S. Treasury Bills maintain a stable value if held to maturity, but returns are generally only slightly above the inflation rate.

Diversification does not ensure a profit or guarantee against loss.

KLR Investment Advisors LLC (“KLRIA”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where KLR Investment and its representatives are properly licensed or exempt from licensure.

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