Welcome to the second quarter! What a first quarter it was. Despite various market and economic threats, it was a solid start for the global financial markets in 2023 (Morningstar, Mar. 2023). Only the star performer from 2022 (commodities) was down in the first quarter, but with oil prices up big Monday morning (on the news that OPEC is slashing output), commodities should even start the second quarter on a strong foot (Morningstar, Mar. 2023).

Regarding overall performance last week:

  • The overall market finished the first quarter on a strong note with major indices rising nearly 2% on Friday alone (Morningstar, Mar. 2023).
  • The S&P 500 rose nearly 4% last week, capping off a near 8% gain for the first quarter of 2023. The market continues to show strength despite headwinds from higher-than-average inflation, Fed action, and banking sector concerns (Morningstar, Mar. 2023).
  • Gains for the quarter were led by growth stocks, with the NASDAQ 100 gaining nearly 21% on the quarter (Morningstar, Mar. 2023).
    • This was the NASDAQ’s best quarter since the Covid crash rebound in Q2 2020 and its third best quarter in the last decade, officially putting it in a bull market (Morningstar, Mar. 2023).
    • While the NASDAQ is in a new bull market, it is still down 25% from its record high (Morningstar, Mar. 2023). The S&P is down 10% from its record high (Morningstar, Mar. 2023).
  • Good news for balanced portfolios: bonds posted a quarterly gain of nearly 3% for the quarter after one of their worst years in history last year (Morningstar, Mar. 2023).
    • According to Bespoke Investments, “the 60/40 portfolio (60% S&P 500, 40% Bloomberg Aggregate bond), has rallied 9.46% over the last two quarters, but still down 12.6% from the market high at the beginning of 2022.” (Bespoke, Mar. 2023)


Weekly Market Bullets with Rusty Vanneman, CFA, CMT, BFA, Vol. 112


Deeper Dive

As of March 30, 2023, just nine companies have contributed ~160% of the gains in the S&P 500; just three companies have contributed 91%, according to Carl Quintanilla’s tweet on March 30.

What’s the biggest mistake investors make? Picking the wrong stock? Paying too high fees? Incorrect asset allocation? Turns out, it’s almost all behavioral. According to fan favorite Ben Carlson in his March 31, 2023 article on AWealthofCommonSense.com, there are “only a handful of ways investors fail in the markets”:

  • Allowing your emotions to get the best of you
  • Chasing fad investments
  • Not following an investment plan
  • Thinking you’re smarter than the markets
  • Being overconfident in your abilities as an investor

While flocking to cash is a behavioral finance no-no, the Wall Street Journal just released a guide on “Where to Put Your Money During a Banking Crisis” for nervous investors (WSJ, Mar. 2023). Here are some highlights:

  • “Despite recent strains in the banking sector, a bank account remains the simplest place to store cash” (WSJ, Mar. 2023). “Balances up to $250,000 are protected by the Federal Deposit Insurance Corp., or FDIC, at any U.S. bank” (WSJ, Mar. 2023).
  • “But checking accounts still offer almost no return on that money, and there are higher paying alternatives” (WSJ, Mar. 2023). “Those include high-yield savings accounts, money-market funds, certificates of deposit, and short-term Treasurys” (WSJ, Mar. 2023). “All of those are boasting interest rates around 3% to 5%” (WSJ, Mar. 2023).
  • “Financial advisers note that holding cash means missing out on any gains, along with the losses, and caution against market-timing” (WSJ, Mar. 2023).

As for key interest rates last week:

  • Interest rates generally rose last week, with the most significant increase coming from the average money market yield, up to 4.61% (Crane Data, Mar. 2023).


Weekly Market Bullets with Rusty Vanneman, CFA, CMT, BFA, Vol. 112


We’ve touted the use of commodities and alternatives in multi-asset portfolios many times, and for good reason. The recent Credit Suisse Global Investment Returns Yearbook includes a 120-year study that concludes that owning commodities futures contracts is the one proven hedge against inflation per the Wealth Advisor March 30, 2023 article titled, “The ‘Unique’ Investment That Protects Against Inflation”.

  • “Historically, commodities have had a low correlation with equities and a negative correlation with bonds, making them effective diversifiers.” “However, their inflation-hedging properties also mean that, in extended periods of disinflation, they tend to underperform.” (Wealth Advisor, Mar. 2023).
  • It is often claimed that equities are a hedge against inflation. But we found this is incorrect. Equities performed especially well in real terms when inflation was low, but high inflation impaired performance and deflation led to lower returns than on government bonds.” (Wealth Advisor, Mar. 2023).

We’re 30 days out from the next Fed interest rate decision and, as of now, according to the CME Group’s FedWatch tool (which has arguably been one of the key charts to watch this year):

  • At a current target range of 475-500, the market is pricing about a coin flip’s chance of an interest rate pause versus another 25-basis point increase to the overnight rate (CME Group, Mar. 2023).

Volatility in the Implied Fed Funds Rate continues to be wild, as of March 31, 2023 (CME Group, Mar. 2023).

ETF Flows data as of February 28, 2023 from Schwab in its February 2023 “ETF industry highlights” report:

  • International equity and U.S. fixed income dominate YTD flows (Schwab, Mar. 2023).

Speaking of international, last week Orion Portfolio Solutions (OPS) had our March Portfolio Recipe Webinar. It was the Global Portfolio Recipes with investment strategists Vanguard and iMGP.

Can’t get enough market commentary? Here’s the OPS Monthly Market Commentary for March 2023: Stay Invested / Stay Diversified / Stay Disciplined — Part II 

Economic data last week:

  • Personal income and consumption were the headline data points last week. According to First Trust’s March 31, 2023 report, incomes rose 0.3% in February, which outpaced inflation for the eighth consecutive month. Increased spending came from an increase in service spending, while goods spending was unchanged.
    • Notably, an increase in PCE will be a significant data point for the Fed’s grapple with inflation (First Trust, Mar. 2023). The area where the Fed is now focused, services, rose 0.2% in February, which was the smallest increase since last July (First Trust, Mar. 2023).


Weekly Market Bullets with Rusty Vanneman, CFA, CMT, BFA, Vol. 112


Here is the economic data calendar for this week:

  • This week will provide a fresh look into the employment situation in the US with job openings, nonfarm payrolls, and the unemployment rate being released (MarketWatch, Mar. 2023).


Weekly Market Bullets with Rusty Vanneman, CFA, CMT, BFA, Vol. 112


Atlanta Fed’s GDPNow projection (as of March 31, 2023) for first-quarter GDP is now at 2.5% (down 7 basis-points from last week).

  • The decreased projection came from the US Census Bureau and US Bureau of Economic Analysis, which showed reductions in personal consumption expenditures growth, real gross private domestic investment growth, and real government spending growth (GDPNow, Mar. 2023).


Crypto Corner – Grant Engelbart, CFA, CAIA, Brinker Capital Sr. Portfolio Manager

  • Crypto prices rose last week, with many coins that lagged the week prior rebounding (CoinMarketCap, Mar. 2023). Bitcoin climbed 3.8% to near $28,500; Ethereum jumped 5% to $1,815, and Cardano (7th largest coin) notched a 12% gain (CoinMarketCap, Mar. 2023). Most other large market cap cryptocurrencies rose in the 2-7% range (CoinMarketCap, Mar. 2023).
  • The US Commodity Futures Trading Commission (CFTC) sued the world’s largest crypto exchange, Binance, for offering illegal trading products to US customers (Decrypt, Mar. 2023). Earlier in March, the US Government sold $215 million worth of $1.1 Billion seized from the shutdown of the Silk Road online marketplace (Decrypt, Mar. 2023). They plan on liquidating the rest throughout the year in four batches (Decrypt, Mar. 2023). The Bitcoin hash rate (computing power of the network, security and transaction speed) reached an all-time high last week (Blockchain, Mar. 2023). The FDIC plans to return crypto deposits at Signature bank to clients next week (The Block, Mar. 2023).
  • No new digital asset ETF launches, however last week saw the large inflow into digital asset related products since last summer (ETF.com, Mar. 2023).
  • Bitcoin (+71.68%) had its best quarter in two years (Decrypt, Mar. 2023).


Additional Resources

“People can be full of book knowledge and crammed with information but have no real sense of what’s going on around them. It is in fact a function of character and fearlessness.” ~ Robert Greene (GoodReads, Mar. 2023)

In this week’s Orion’s The Weighing Machine podcast we talk to the founder and CEO of Toews Asset Management, Phillip Toews. In my interview with Phil (live from last month’s Ascent conference), we discuss the value of tactical investing and how tactical strategies fit into client portfolios. Additionally, we get Phil’s take on the current economic environment, including rising debt levels.

The CFA Institute recently announced the ‘Most Significant Changes to Program in 60 Years.’ Starting in 2025, the third level of examination will include a choice between three specialized paths: the traditional portfolio management path, the private wealth path, and the private markets path (Wealth Management, Mar. 2023).

The metaverse was supposed to be the next big thing. Well, maybe not… Just this month, industry leaders Disney and Microsoft both closed projects and even entire divisions tied to virtual reality, according to the Wall Street Journal article “The Metaverse Is Quickly Turning Into the Meh-taverse” (Mar. 2023). And I never could have seen this coming, but prices for “virtual real estate” have declined 90% from a year ago (Wall Street Journal, Mar. 2023).

I might be one of the last ones to see this, but I finally saw the Netflix documentary “Eat the Rich” about the GameStop story. It was well-done in my opinion – it was balanced, entertaining, and had lessons to be learned.

The Abnormal Returns article from March 27, 2023 titled, “When Average Isn’t Enough” about getting outside your comfort zone, makes the argument why you should always differentiate:

  • The index mindset is comfortable – avoiding decisions requires the least amount of effort. But if you index across every domain, you lose your differentiating features, becoming an average of everyone else. (Abnormal Returns, Mar. 2023)

Here’s another one of those rambling, thought-provoking Professor Galloway weekly missives, from March 30, 2023, which included this nice quote to remember: “Anything that happens in real life is profoundly better, kinder, and more human than its online facsimile.” (ProfGalloway.com, Mar. 2023)

Spring is quickly approaching and this week helps usher it in with the Masters Tournament!

Thanks for reading and have a great week! As always, please let us know what we can do better at rusty@orion.com or ben.vaske@orion.com. Invest well and be well.


Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.
Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments under the parent company, Orion Advisor Solutions, Inc.
The CFA is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.
The CMT Program demonstrates mastery of a core body of knowledge of investment risk in portfolio management. The Chartered Market Technician® (CMT) designation marks the highest education within the discipline and is the preeminent designation for practitioners of technical analysis worldwide. To learn more about the CMT, visit https://cmtassociation.org/.
The CAIA® is the globally-recognized credential for professionals managing, analyzing, distributing, or regulating alternative investments. To learn more about the CAIA, visit https://caia.org/.