Markets & the Economy

Market Commentary – October 2023

Monthly Commentary as of 10.31.2023

The Month In Review

  • Financial market performance in October was negative across the board.  The Energy sector led the decline in the S&P 500 Index, while the Utilities sector posted a gain.  The relative outperformance of a defensive sector like Utilities may reflect a resurgence of recession fears even though third quarter growth surprised to the upside.  Bond yields also rose, more so for longer-dated bonds, which led to negative total return for the second month in a row.
  • The initial read of third quarter GDP was 4.9% annualized, propelled by strong consumer spending, government spending, and inventories.  The residential investment category also posted a gain, its first increase since the first quarter of 2021.
  • Government bond yields rose in October as elevated supply from a growing deficit combined with only limited progress on inflation led to higher yields.  Yields on longer term bonds rose more than short term bonds.  Risk spreads on non-government bonds also moved wider, further reflecting the dismal sentiment.

The Month Ahead

  • The Federal Reserve’s Federal Open Market Committee meeting ending on November 1 resulted in no change to the federal funds rate.  The December meeting could still result in another rate hike, but deteriorating financial conditions may preclude action.
  • Worsening geopolitical tension has raised the risk for global economic growth, but the conventional flight-to-quality retreat to Treasuries has not yet played out.

  • Monetary policy works with a long and variable lag, but the manufacturing sector does appear to be reflecting tighter financial conditions and higher rates.  The ISM Manufacturing index for October came in at 46.7, compared to 49.0 for September and decidedly below the contraction threshold of 50.
  • At the same time, the JOLTS report for September showed a gain in job openings.  Labor market slack has been difficult to find even after one of the most rapid rate hike cycles in modern history and this remains a paradox that could result in still further policy tightening.
  • The monthly employment report on November 3 provided relief to those looking for a reason for the FOMC to refrain from another rate hike.  Downward revisions to prior months were accompanied by a slight uptick in the unemployment rate to 3.9%, and the overall gain of “only” 150K was the second lowest monthly job gain of the year.
  • In evaluating equity market performance, small cap growth was the hardest hit domestic index for the second month in a row.  This may be due to the more challenging financial conditions facing the small business sector from tighter lending standards and higher interest rates.

  • Microsoft,, and UnitedHealth Group were the top three contributors to the S&P 500 index return in October.  Tesla, Nvidia, and Exxon Mobil were the biggest detractors.
  • While not a large percentage of the S&P 500 index, insurance companies represented three of the top five absolute returns for the S&P in October: Allstate, Progressive, and Willis Towers Watson.


Firm Definition and Contact Information

Maple Capital Management, Inc. (MCM) is an independent SEC Registered Investment Advisor with offices in Montpelier, Vermont and Atlanta, Georgia.

This commentary reflects the views of MCM and should not be considered to be investment or financial advice. MCM does not warranty these views and will not update this communication after the date of publication. Any mention of specific securities is done for illustrative purposes and the securities mentioned may or may not be held in client accounts. No assumption or assurance should be taken that securities mentioned will be safe or profitable investments. Past performance is not indicative of future results.

For further information, please contact Steven Killoran at 1-802-229-2838 or at [email protected]. For further information about Maple Capital, including a copy of our informational brochure, please visit our website at

Index Definitions

The S&P 500 (S&P 500) Total Return is a market capitalization-weighted index composed of the 500 most widely held stocks whose assets and/or revenues are based in the US; it’s often used as a proxy for the U.S. stock market. TR (Total Return) indexes include daily reinvestment of dividends.

MSCI EAFE Total Return Net is the Morgan Stanley Capital International Europe, Australia, and Far East index that is a market-capitalization-weighted index of 21 non-U.S. industrialized country indexes. The index includes net dividends reinvested minus-tax-credit calculations, but subtracts withholding taxes retained at the source for foreigners who do not benefit from a double taxation treaty.

The MSCI Emerging Markets (MSCI EM) Index captures large and mid cap representation across 27 Emerging Markets (EM) countries.

Bloomberg Municipal Bond Index Total Return Index Value Unhedged USD (Municipal Bond Index) covers the US-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and prerefunded bonds.

The Bloomberg U.S. Aggregate Bond Index measures the performance of investment grade, U.S. dollar-denominated, fixed rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS. It rolls up into other flagship indices, such as the multi-currency Global Aggregate Index and the U.S. Universal Index, which includes high yield and emerging markets debt.

The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a depository institution has surplus balances in its reserve account, it lends to other banks in need of larger balances. In simpler terms, a bank with excess cash, which is often referred to as liquidity, will lend to another bank that needs to quickly raise liquidity. (1) The rate that the borrowing institution pays to the lending institution is determined between the two banks; the weighted average rate for all of these types of negotiations is called the effective federal funds rate.(2) The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target. All Key Rates and Returns by Index are quoted out of Bloomberg.

The CPI Index represents changes in prices of all goods and services purchases for consumption by urban households. Retail Gas Prices are provided by AAA using data from up to 120,000 retail stations. West Texas Intermediate (WTI) crude oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude.

Equity Returns by Sector are based on the GICS methodology. Return data are calculated by Bloomberg using constituents and weights as provided by Standard & Poor’s. Returns are cumulative total return for stated period, including reinvestment of dividends.

Chart Definitions

The Services and Manufacturing PMI from the Institute for Supply Management (ISM) is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. The Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes with equal weights: New Orders (seasonally adjusted), Production (seasonally adjusted), Employment (seasonally adjusted), Supplier Deliveries, and Inventories (seasonally adjusted). Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

The PCE Price Index Excluding Food and Energy, also known as the core PCE price index, is released as part of the monthly Personal Income and Outlays report. The core index makes it easier to see the underlying inflation trend by excluding two categories – food and energy – where prices tend to swing up and down more dramatically and more often than other prices. The core PCE price index is closely watched by the Federal Reserve as it conducts monetary policy. The PCE price index, released each month in the Personal Income and Outlays report, reflects changes in the prices of goods and services purchased by consumers in the United States. Quarterly and annual data are included in the GDP release.

Total Nonfarm, commonly known as Total Nonfarm Payroll, is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed. This measure accounts for approximately 80 percent of the workers who contribute to Gross Domestic Product (GDP).


This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted that investments involve risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.

Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss.