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By Grant Melancon
September 15, 2023
Investment Management

Portfolio Manager Commentary

September 15, 2023

The Portfolio Manager Commentary is provided by Trustmarkโ€™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. Durable Goods Orders were down 5.2% in July versus having been down 5.2% in June. Industrial Production was up 0.4% in August versus +0.7% in July. Capacity Utilization remains moderately high at 79.7%. The Markit Purchasing Managers Index remains contractionary, at 47.9 for August. This matches the ISM Manufacturing Index which came in at 47.6 for August. The Markit PMI Services index, and the ISM Services Indexes, were both slightly expansionary, at 50.5 and 54.5, respectively for August. The U.S. Unemployment Rate was 3.8% for August, up from 3.5% in July. Average Hourly Earnings were up at an annual rate of 4.3% in August versus having been up at an annual rate of 4.4% in July. Producer Prices were up 0.7% in August, versus +0.4% in July. Consumer Prices were up 0.6% in August versus +0.20% in July. On a year-over-year basis, Consumer Prices were up 3.7%.

Fixed Income

The U.S. Treasury Yield Curve remains inverted, with the 10-year yield trading at 4.33%, 70 basis points below the 2-year yield of 45.03%. The U.S. Treasury Yield Curve has now been inverted for 15 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 5.40%-5.50%, which is within the range of the FOMCโ€™s current Fed Funds rate target.

Yield Curve

U.S. Treasury Yield Curve

Current Generic Bond Yields

Current Generic Bond Yields


US equity is lower for the month as the S&P 500 index is down -1.06%. All eyes continue to be on the Fed and inflation as Augustโ€™s Core PPI is in line while retail sales and initial claims come in hotter than expected. The Fed is largely expected to hold policy rates at the current 5.25-5.50 level for the upcoming September meeting with a current 1/3rd chance of another rate hike near the end of the year, though this is completely data dependent. There have been observations of the disinflation theme slowing, though it is largely expected the slowdown will pick back up.

Not much has changed in the growth vs value narrative as growth (+22.21%) is outpacing value (+12.37%) +9.84% year-to-date. This is largely led by the three top sectors, Communication Services (+41.81%), Technology (+36.53%), and Consumer Discretionary (+34.03%). Health Care (-1.15%), Consumer Staples (-1.72%), and Utilities (-5.89%) are the few negative sectors 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.