Market Commentary 08/09/23

As July ended, the S&P 500 recorded its fifth consecutive monthly gain, having recovered most of the losses from 2022. Additionally, the index is currently trading less than 10% below its all-time closing high set in January 2022. On a related note, the Dow Jones Industrial Average, which tracks 30 prominent U.S. companies, closed higher for 13 consecutive days, the longest such streak since 1987. Like the S&P 500, the Dow Jones is also trading less than 10% below its all-time closing high reached in January 2022. As mentioned in our recent quarterly commentary, this year’s market gains have been led by the rally in megacap tech stocks. This has given some investors opportunities to look for value in areas of the stock market that have not rallied as much and consider a rotation within the equity component of their portfolio to potentially lock in some of the outsized gains this year.

The continuation of the market increase in July was likely fueled by positive expectations. Many investors now believe the U.S. economy has averted the recession many economists predicted for 2023. Job growth, consumer spending, and corporate earnings remain resilient despite higher interest rates. The recent downward trend in inflation data is adding to this optimism, with investors hopeful that the Federal Reserve can achieve a soft landing and potentially avoid a recession altogether. Despite the favorable trends in the first half of 2023, there is concern that the Fed may need to keep raising interest rates due to recent increases in home and commodity prices.

Important Disclosures: The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The information contained herein is based on technical and/or fundamental market analysis and may be based on data obtained from recognizable statistical services, issuer reports or communications or other sources believed to be reliable. However, such information has not been verified by us, and we do not make any representations as to its accuracy or completeness. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Yields are given as of 8/2/2023.Bonds are subject to price and availability. Additional information is available upon request.
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