Investment Update | Saratoga National Bank

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Investment Update

Updated December 1, 2023

Our investment team remains committed to sharing regular updates and market insights to keep you informed. Please look for our next update on December 15.

Markets Take a Breather

Equity markets have been relatively flat over the last couple of weeks following the sharp rise from late October through mid-November. This isn’t all that surprising, given that we’re in a slow period for economic and company earnings news. There’s been some rotation in performance, with year-to-date laggards such as financials and small-cap stocks doing well lately. A period of consolidation is not abnormal after a strong run, and the markets may just be pausing before taking another leg up. December is typically one of the better months of the year for stock returns.

The broad market S&P 500 is now up nearly 19 percent year-to-date, while the value-oriented Dow Jones Industrial Average is up 8.45 percent for the year. The tech-heavy NASDAQ is up 35.9 percent this year as mega-cap tech stocks such as Apple, Microsoft, Amazon, Google and Meta lead the way.

Bonds have been on a good run lately. The benchmark Bloomberg Bond Aggregate Index is up 4.4 percent over the last month and is now up more than 1.6 percent year-to-date. If this holds, it will be the first positive year for the index since 2020. The 10-Year U.S. Treasury yield has dropped from 5 percent in late October to 4.3 percent. This is one of the main reasons the 30-year mortgage rate has dropped significantly. According to, the current average 30-year fixed rate mortgage is now 7.66 percent, down about .4 percent since late October.

Interesting Times in the Housing Market

At first look, it would appear that the housing market is in sharp contraction. Existing home sales in October were at a 3.79 million annualized seasonally adjusted rate. This was the lowest level since 2010, the height of the housing market crash following the Great Recession. The National Association of Home Builders Housing Market Index has fallen 22 points since July to 34. However, the latest reading of the S&P/Case-Shiller Home Price Index was up 3.9 percent year-over-year, its third straight positive reading.

We believe there is strong underlying demand for real estate driven by Millennial and Gen Z households. However, high interest rates and lack of supply kept a lid on purchases this year. Mortgage rates have more than doubled over the last couple of years, limiting purchasing power. Lack of supply has been driven by people choosing not to sell their homes. Many homeowners who purchased their homes or refinanced their mortgages at historically low rates before or during the pandemic have been unwilling to move and take on a new high-rate mortgage.

The lack of home purchases negatively affects the overall economy. There are many economic activities associated with home sales, from closing costs, to moving costs, to redecorating and landscaping. A dearth in housing transactions is a drag on the overall economy.

What Should I Be Doing With My Investments?

We encourage you to pay attention to the latest developments, but not to lose sight of your long-term investment strategy. Reach out to our investment team to discuss your options and reaffirm your timeline and goals. Call our investment team at (518) 415-4401.