Portfolio Manager Commentary

December 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. Durable Goods Orders were down 5.4% in October versus having been up in September. The Chicago PMI was up to 55.8 in October from 44.0 in September. The U.S. Index of Leading Economic Indicators was down 0.80% in October after having been down for several months before October. The University of Michigan Sentiment Index came out at 61.3 for November versus 60.4 for October. Finally, new U.S. Single-Family Home Sales came in at 679,000 units on an annualized basis for October versus 719,000 units in September.

Fixed Income

The U.S. Treasury Yield Curve remains inverted, however this inversion has continued to stay flatter somewhat, with the 10-year yield at 4.29%, 37 basis points below the 2-year yield of 4.66%. The U.S. Treasury Yield Curve has now been inverted for 17 months. At its recent November meeting, the FOMC left the Federal Funds target rate range at 5.25% - 5.50%. The three-month and six-month U.S. Treasury Bills currently yield in a range of 5.08%-5.38%, which is within the range of the FOMC’s current Fed Funds rate target.

Yield Curve

Current Generic Bond Yields

Equity

US equity had a strong month as November saw the S&P 500 large cap index up 7.98%. Continued soft-landing expectations and Fedspeak were largely responsible for the rally as Fed Governor Waller commented he is confident that Fed policy is well positioned to get inflation back to 2% and there is no reason for rates to remain high assuming inflation continues to come down.

Almost all sectors finished the month positively with Tech (+10.75%) continuing to lead the way. Financials (+10.22%) finished strong after a rough start to the year while Energy (-0.48%) was the only negative sector.