Happy 4th!!!

Happy 4th!!!

July 03, 2023

Happy Independence Day to You!

June was an absolute stunner for stocks.  The S&P 500 was up over 6% alone.  The Bloomberg US Aggregate Bond Index was fairly sideways all month, but with the stock market being up so high, it was worth it.  This gets us through half the year with the S&P 500 up over 15%.  I would say this is happily surprising for most people.  It’s been such an incredible run.  I think we would’ve been grateful with this upside through the end of the year.  We might’ve finally got some of that FOMO I was referencing back in April.  It will definitely be interesting to watch this play out over the second half.  There will be some profit takers at this level, but hopefully the buyers push through the pressure.

We finally exited the bear market as well in June.  This was the longest bear market since 1948.  I hate being part of this kind of history.  With that behind us, the “new news” is whether we will hit a recession sometime this year or early next year.  All eyes will be on the Federal Reserve’s interest rate policy if/when the economy gets a bit shaky.

LPL Research had a somewhat upbeat note that I found helpful. In June, consumer confidence rose to 109.7, the highest it has been in over a year, as the geopolitical landscape and the banking sector stabilized. Two important details of the report for investors to take note are insights into inflation and the six-month outlook. Inflation expectations fell to their lowest since 2020, while the outlook, as measured by the Expectations Index, remained below 80, the level consistent with a recession within the year. Investors should anticipate inflation easing further throughout this year as the economic outlook dims. Markets still must deal with the unknowns with regional banks and empty office space but so far, other areas of the economy seem to be strong enough to offset the potential downsides of the Fed’s aggressive rate hiking campaign.”

Let’s hope this Summer heat transfers to the markets.  How wonderful it would be to see another upside surprise the next couple months.

Larry Mroczkowski

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.