The 3-minute quarterly updated and insights for quarter 2 of 2023.
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. 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.
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.
This is a good sign and could potentially mean that we are 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 sill key in today’s uncertain environment.
The big question has been, is a recession coming? 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. Others see the pressure of high interest rates resulting in a “moderate” recession this year or next. Which prediction will be correct? We will have to wait and see.
Here are just some of the factors we are watching in the weeks and months ahead.
The Federal Reserve has indicated that it
plans to raise rates again in 2023. 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
Exuberance around artificial intelligence
could give way to pessimism, causing selling
pressure on high flyers.
Markets have roared back since the 2022 doldrums, but expect volatility ahead.
The S&P 500 is a stock index considered to be representative of the U.S. stock market in general. The NASDAQ Composite Index is an unmanaged composite index of over 2,500 common equities listed on the NASDAQ stock exchange. The Dow Jones Industrial Average is a price-weighted index that tracks 30 large, publicly traded American companies.
All index returns exclude reinvested dividends and interest. Indices are unmanaged and cannot be invested into directly.
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. This content may contain projections, forecasts, and other forwardlooking statements that do not reflect actual results and are based on hypotheses, assumptions, and historical financial information. 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.
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