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It Has Begun

It Has Begun

October 05, 2023

It is here…

Small business bankruptcies are up more than 25% from last year, credit card spending is way down, and student loan repayment has resumed.1

With that being said let’s get our intro out of the way and then jump into our content…

Welcome to this week’s episode of The Gate Market Update. The markets have had quite a week and a half, and we are very excited to discuss the current events.

In our recent issues we have been repeatedly discussing the effects of interest rates on small businesses, inflations stress on consumers and the effects that resuming student loan payments will have on the overall economy. Today, we do not want to beat a dead horse from our previous posts, rather we will discuss how these events have already started and are already affecting the economy.

Earlier this week, I saw a graph from the “American Bankruptcy Institute” showing that in the first 9 months of this year there are roughly as many small bankruptcies as there were in the entirety of last year and significantly more than in 2020. This is remarkable, because small businesses are often lead or coincide with the current state of the economy. Small businesses typically go under due to less demand, which only occurs when consumers that used to frequent these businesses are cutting back on their spending. Of course, there are some that fail for other reasons, but when we see a macro trend of bankruptcies it shows that the average consumer is hurting.

Additionally, this can spark a difficult cascade. When consumers stop visiting small businesses, those businesses go out of business. When those businesses close, it puts their employees into a financial bind, thus continuing the cycle of decreased spending.

With the pain already starting, it is important to remember that student loan repayments are resuming. A simple calculation shows that one could have as much as a $450/month payment on just a $40,000 loan. This may take some consumers by surprise and others, as we talked about last week, have already begun planning cuts in discretionary spending.

From a technical point of view, the Dow has recently dropped beneath both its moving averages after a strong head and shoulders pattern. Although we could see a bounce back soon, long term trend from this point can easily turn bearish if there is no major move upward. Keep an eye out for a death cross of the two moving averages.


In conclusion, there is a lot of stress in the economy which may lead to prolonged downturn or recession. Small businesses are the first to take a hit along with the low-income consumer, but there are no guarantees it stops there.

At the Cornerstone Financial Group, this is where we thrive, anyone can get gains when everything is rosy, however, when times are tough, it can pay off to have professional guidance.


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OneAscent Financial Services, LLC (“OAFS”), d/b/a The Cornerstone Financial Group, is a registered investment adviser with the United States Securities and Exchange Commission. OAFS does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by OAFS or any unaffiliated third party. OAFS is neither an attorney nor accountant, and no portion of the presented content should be interpreted as legal, accounting, or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. 

1Shedlock, M. (2023, October 1). Small business bankruptcies surge in 2023, five reasons why. MishTalk.