Q2 2023 Review | Market Update
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Global stock markets continued their winning streak in the 1st half of 2023 (chart 1). The S&P 500 is up over 15% this year with it's 3rd consecutive quarterly gain. Our interpretation of the market's message is that the Fed can engineer a "soft landing," which means that aggressive monetary policy (raising interest rates) might not be enough to tip the economy into a recession. Although soft landings are incredibly rare (chart 2), we respect the possibility that a recession might not come to fruition this year.
There are several encouraging economic developments, some of which are listed below:
1. Strong Housing Market
2. Strong Jobs Market (low unemployment, large number of job openings)
3. Moderate Inflation - Still above the Fed's target of 2%, but much better than 9% last year
But there are also signs of slowing economic activity:
1. Jobless Claims
2. Leading Economic Indicators: Since 1970, when leading indicators are this weak, the economy has always been in a recession.
3. Manufacturing Sector is contracting.

Source: Beyond Wealth
