|The Financial Quarterly
After a strong start to the year, stocks shrugged off bank woes, debt ceiling gridlock, and recession jitters to turn out a powerful Q2 performance.1
Is the bear market finally over? Will we see more volatility ahead?
Let’s take a look at what happened in Q2 and what might be in store for Q3.
How Did Markets Perform Last Quarter?
The broader U.S. market ended the first half with a bang, completing its third straight quarter of gains.1
The tech-focused NASDAQ surged in Q2, delivering its best first half since 1983.1
The blue-chip Dow lagged its counterparts, but still delivered respectable gains in Q2.1
What Factors May Influence Markets in the Months to Come?
Let’s take a look ahead at some of the factors that we’ll be watching in the weeks and months ahead.
The Federal Reserve has indicated that it plans to raise rates again in 2023.2 The pace and magnitude of those hikes are likely to impact market sentiment.
Markets tend to reflect perceptions of the economy, so investors will be closely watching the data on inflation, jobs, spending, housing, and other sectors.
Recession fears are still present and any data suggesting economic growth is turning negative will likely weigh on markets.
Apprehension around new regulations and the upcoming election season may influence markets.
War in Ukraine
The Russian invasion of Ukraine and Russian leadership struggles may inject more global uncertainty.
Exuberance around artificial intelligence could give way to pessimism, causing selling pressure on high flyers.3
Key Takeaways for Savvy Investors
What should we take away from the first half of 2023?
Things are looking up.
Optimism drove markets in the first half of the year and there’s reason to believe that positive trends could continue.
While a few key technology stocks contributed significantly to index growth, there are signs that the confidence is spreading to broader areas of the market.4
This is a good sign and could mean that we’re in the early stages of a bull market.
However, rallies don’t typically move in a linear fashion so it’s wise to expect pullbacks and corrections in the months ahead.
Flexibility is still key in today’s uncertain environment.
Is a recession coming in 2023?
That’s a tough question because the answer is still being hotly debated.
Some economists believe the risk of a recession is decreasing and see only a 25% chance of recession in the next 12 months.5
Others see the pressure of high interest rates resulting in a “moderate” recession this year or next.6
Which prediction will be correct?
We’ll have to wait and see.
Bottom line: we’re watching the data, staying flexible, and looking for opportunities.
Securities offered through SagePoint Financial, Inc. (SPF), member FINRA/SIPC. Additional advisory services offered through The AmeriFlex® Group, an Independent Registered Investment Advisor. SPF is separately owned and other entities and/or marketing names, products or services referenced here are independent of SPF. Insurance is offered independent of SPF. This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the intended recipient. Any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, (i) please notify the sender immediately and (ii) destroy all copies of this message.
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.