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  • Writer's pictureDerek Sauerwine

June 2023 Market Review & Commentary

We hope that you were able to have an enjoyable Fourth of July holiday weekend. We made the trek up to Pennsylvania to spend time with family and we were so happy to join in on a 50th wedding anniversary within our immediate family. It is amazing how time flies by and it really is mind blowing that many events that were decades ago can still seem like they were just yesterday. This is an excellent transition to reviewing the first half of the year (which has flown by).

The first half of 2023 was marked by continued economic resilience and a rebound in the equity markets which we have been covering for 6 months. The U.S economy outperformed almost everyone’s expectations despite the Fed’s aggressive 2022/2023 rate hikes, with new home sales rising, personal income growing and continued job creation. Corporate earnings exceeded expectations, and the S&P 500 gained more than +15% YTD. In review of the credit markets, which we have been waiting for with bated breath, liquidity remained robust and bond investors were rewarded for the 1st time in maybe 40 years. Though everything during the 1st half seemed like a magical updraft, the more value oriented Dow Jones Index did not flourish as it gained only +3.8% during the six month period. The first half rally we saw was not enjoyed by the entire market but was only felt by a few handful of areas. We will be also watching to see if this breadth expands or if the winners might come back to the pack.

As the markets and the economy enter the second half of 2023, investors are left asking whether the good times can continue. Just like thinking my lawn can make it through the months of July and August unscathed, we believe that the challenges shall be stout. We will be watching as companies start to report their Q2 results, which will provide fresh insights into the economy’s health, and this may go a long way in signaling to everyone if the 1st half rally was warranted. We will also be watching for the delivery of news from the two-day Fed meeting ending on July 26th along with the Consumer Price data on July 12th. While keeping our eyes on these big events, we are all trying to read the tea leaves on how the tightening of interest rates will be felt into the overall economic patterns currently and the future.

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