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By Tony Jasinski
September 01, 2023
Investment Management

Portfolio Manager Commentary

September 1, 2023

The Portfolio Manager Commentary is provided by Trustmark’s Tailored Wealth Investment Management team. The opinions and analysis presented are accurate to the best of our knowledge and are based on information and sources that we consider to be reliable and appropriate for due consideration1.


Economic Outlook

U.S. Retail Sales were up 0.70% for July after having been up 0.30% in June. The Index of Leading Economic Indicators was down 0.40% for July after having been down 0.70% in June. The Chicago Purchasing Managers Index was 48.7 for August, fairly close to neutral territory. Industrial Production was up 1.00% for July after having been down 0.80% in June. Capacity Utilization remained a robust 79.30%. The University of Michigan Consumer Sentiment data revealed a 69.5 print for August versus 71.2 for July – so the consumer remains not terribly upbeat about current conditions. New Single-Family Home Sales came in at a 714,000 annualized level in July, still a bit below normalized levels, which should be in the 800,00-900,000 unit range. Finally, the PCE Core Inflation data came in at +4.20% year-over-year in July, versus +4.10% in June. On a three-month rolling basis, the PCE Core Inflation was up at a more reasonable 2.40%.

Fixed Income

The U.S. Treasury Yield Curve remains inverted, with the 10-year yield trading at 4.19%, 70 basis points below the 2-year yield of 4.89%. The U.S. Treasury Yield Curve has now been inverted for nearly 14 months. At its recent July meeting, the FOMC increased the Federal Funds target rate by 25 basis points to 5.25% - 5.50%. The minutes of this meeting reflect that the FOMC remains strongly committed to keeping inflation down near 2.00% per year while maintaining full employment. The three-month and six-month U.S. Treasury Bills currently yield in a range of 5.43%-5.49%, which is within the range of the FOMC’s current Fed Funds rate target.

Yield Curve

U.S. Treasury Yield Curve

Current Generic Bond Yields

Current Generic Bond Yields


US equity finished the month lower for the second time this year (next to February) as the S&P 500 fell -1.09% and the NASDAQ -1.74%. All eyes continue to be on the Fed as one of the main equity headwinds is contributed to the backup in rates, which is largely due to many factors such as supply pressures, peak disinflation chatter, and the Fed pivoting expectations of rate cuts due to continued US growth outlooks. As of now, it is expected the Fed holds rates steady in the September meeting, though there is currently a 30% - 40% chance of another rate hike near the end of the year, though largely dependent upon continued economic growth data.

Energy (+3.73% MTD) emerged as the leading sector for the month as the sector has been lagging most of the year, while Consumer Staples (-3.69% MTD) and Utilities (-4.86% MTD) continue to be beaten down for the month as both sectors are negative for the year (-1.50% and -9.14% respectively). The S&P 500 is up 18.89% for the year.

Index Returns
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1Sources of statistical information are Bloomberg, Factset Research Systems, and Ned Davis Research. Non-deposit investment products are not insured or guaranteed by any government agency or government sponsored agency of the federal government or any state; are not deposits, obligations, or guaranteed by Trustmark National Bank or its affiliates; and are subject to investment risks, including the possible loss of principal. The opinions and analysis in this report are accurate to the best of our knowledge and are based on information and sources that we consider to be reliable and appropriate for due consideration. The volatility of market conditions and any change from the basic set of assumptions used herein could lead to substantial differences in the projected results and conclusions in this report. All projections, prices and assumptions herein are subject to change without notice. We do not guarantee the results, performance or liquidity of the securities discussed and any strategy or investment selection remains your responsibility. This report is strictly for information purposes and is not intended as an offer or solicitation for any transaction. Tailored Wealth Investment Management is a division of Trustmark Wealth Management.