US stocks have had a great year in 2023, but these figures tell a different story

The US stock market has seen the average return of S&P 500 stocks rise just 1.1% in 2023, which is “a different planet” compared to its average gain of 16.2% in 2014, when The benchmark index posted an 11.4% year-over-year advance, Krinsky said in a Sunday note (see chart below).

The Russell 3000 RUA, a barometer that represents about 98% of U.S. stocks, has averaged a negative 2.2% return this year, but the index has gained 11.3% so far this year, Krinsky wrote , citing data from BTIG and Bloomberg. In 2014, the average return of the Russell 3000 was 6.9% and it posted an annual gain of 10.4%.

Meanwhile, the average year-to-date performance of S&P 1500 stocks, which includes all stocks in the S&P 500, S&P 400 MID, and S&P 600 SML and covers about 90% of U.S. stocks, rose just 0 .1% compared to the index. An advance of 11.2% this year, Krinsky said. The S&P 1500 returned an average of 8.8% in 2014 and rose 10.9%.

See: ‘Anxiety’ rises as stock market falls and bond yields rise: What investors need to know after worst month of 2023 for S&P 500

So far in 2023, investors have struggled to ignore a rise in Treasury yields driven primarily by the Federal Reserve raising interest rates and the risk of recession, hoping that The stock market rally has not yet lost steam.

However, the S&P 500 and the Nasdaq Composite COMP closed their worst month of the year on Friday, falling 4.9% and 5.8%, respectively, according to FactSet data. Treasury yields continued to rise on Monday, with the 2-year Treasury yield BX:TMUBMUSD02Y rising 6 basis points to 5.102%, while the 10-year Treasury yield BX:TMUBMUSD10Y

It rose 10 basis points to 4.669%.

See: The seasonality of the US stock market suggests a possible rebound in the fourth quarter. Why this time could be different.

As a result, investors were hoping that October and the final quarter of 2023 could bring some relief from the scorching summer sell-off they had to endure in the markets. The fourth quarter has historically been the best quarter for the US stock market, with the S&P 500 index rising nearly 80% since 1950 and gaining more than 4% on average, according to data compiled by Carson Group.

“It seems to us that a rebound (in the fourth quarter) is the consensus view based on the fact that seasons tend to work that way,” Krinsky said. “Although October is a strong month in “average” termsIt has fallen ten of the last 30 years, and in eight of those years it lost 1.77% or more.”

In other words, when October is good it tends to be really good, but when it’s bad it tends to be pretty bad, Krinsky added.

U.S. stocks were mostly down on Monday afternoon, with the Dow Jones Industrial Average DJIA down 0.6%, while the S&P 500 lost 0.4% and the Nasdaq up 0.2%, according to data from FactSet.