Watch the CPK Market Action Report: November 2023

The S&P 500 logs its first 3-month losing streak since 2020. Is a year-end rally still a viable possibility for investors or will the 10yr Treasury prove to be too much to handle.

Watch the Market Action Report now:

Market Action Report

November 2023



The S&P 500 logs its first 3-month losing streak since 2020. Is a year-end rally still a viable possibility for investors or will the 10yr Treasury prove to be too much to handle. 

That action starts now!


For the third straight month, equities were feeling the pressure. The Dow Jones Industrials closed lower, losing 1.20% and the S&P 500 was down 2.12%. The Nasdaq once again led the pack lower down another 2.77%.


October locked in the first three month losing streak for both the Dow Jones Industrials and the S&P 500 since March of 2020. The decline in the Nasdaq also marked its third straight negative month.

The losses this month came from a rapid rise in Treasury yields. In particular, the 10-year treasury breached the key level of 5% for the first time since 2007. Stocks may get a brief oversold bounce after the Fed meeting if the language is not too hawkish. However, investors should not be fooled into thinking we have an all-clear signal to get fully invested back into equities. For now, the stock market remains tightly correlated to the 10yr. Treasury meaning as the rate goes higher, equities go lower and that is unlikely to change for the foreseeable future. 


Bond yields definitely spiked higher this month. The 5yr settled in at 4.81% while the 10yr and 30yr closed at 4.87% and 5.02% respectively. It is important to note that we saw a rapid improvement in the inversion of the 10-2yr Treasury spread. The inversion has shrunk to just 18 basis points. Interestingly, just prior to the last four recessions the 10/2yr yield curve un-inverted.

Considering the massive amount of Treasuries that will soon be coming to market to finance our nation’s debt, I find it difficult to think lower rates lie ahead regardless of the Fed’s actions. Investors will want to be paid a premium for taking on the risk of financing a country with a debt to GDP ratio that is in excess of 120%. 


WTI Crude fell sharply at the start of the month before breaking out higher mid-month. However, the lack of any broad military conflict that would drag in multiple world powers pushed the black gold lower for the month to close out at $81.28/bbl. The new multi-month lows shift the near-term technical outlook in favor of the bears, but as long as the Israel-Hamas conflict rages on, the threat of headline-driven short squeezes will remain elevated. 

Copper dipped lower throughout the month but was able to recover and close out slight lower at $3.64/oz. Copper may participate in a dovish-Fed-fueled relief rally if one develops. However, over a longer time frame the fundamental outlook for copper remains bearish due to elevated risks of a looming global recession. 

November Gold shot higher this month to close out at $1,985/oz. The volatility in gold has been extreme over the last six weeks as futures plunged over $100/oz. to test the March lows only to recover back to take out the mid-summer highs above $2,000/oz. Part of the reason for the elevated volatility has been an initial drop and then rapid recovery in real yields. Looking ahead, the near-term trend in gold is bullish after last week’s close at five-month highs. However, futures have become overbought on the daily chart and some consolidation or a pullback towards $1,950/oz. should not come as a surprise. To the upside, the May high of $2,059 is the level to beat for the bulls.


The dollar index was quite choppy all month but was able to produce a strong rally in the last week to finish at $106.57. In the short term, the dollar may see some pressure after Fed Chair Powell bolstered speculation that the Fed is done with their rate hike cycle. For that to be true, it will take soft U.S. economic data to generate any meaningful downturn in the dollar going forward.  


While the resilient economy has some investors and strategists still very confident about equities, others are recommending investors remain defensive due to the longer than expected lag effect compared to similar rate hike cycles. The lag has been created by the impressive amount of stimulus injected during the pandemic in addition to relatively healthy balance sheets for corporations. Having said that, this week we have started to hear of sizeable layoffs in the financial industry as well as others. With the Fed sticking to their higher for longer language, it should come as no surprise to anyone if this trend continues to pick up speed as corporations feel the pinch of trying to meet expected earnings by year end and throughout 2024.


This increase in the yield of longer-term bonds is what investors call a bear steepening and is not good for the economy. Why? The ten-, twenty- and thirty-year bonds are the most closely related rates to consumers and businesses negatively impacting mortgage rates and corporate profits which could ultimately lead to an expansion of layoffs in addition to other long-term lagging impacts. Such a move would not be good for stocks. 


For the month of November, the cash allocation in our equity models remains at 40% due to the model’s more aggressive nature.

Our broad focus is on Commodities and International Equities. As for Commodities, our Energy and Agriculture. In International Equities, our focus is on Europe Emerging, Latin America and Europe Developed.


As a reminder, my current allocation is not a recommendation. Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces RISKS, COSTS and TAXES while securing the necessary income you need to maintain your lifestyle throughout retirement.

If you don’t have a plan OR you’re not comfortable with the plan you have, call me today to get pointed in the right direction.

I’m Chad Kunc and that puts a wrap on the November 2023 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.

And that action starts, NOW!