August 1, 2023

Weekly Market Update

By Michael McKeown, CFA, CPA - Chief Investment Officer

Weekly Market Update

Chart of the Week

The recession everyone ordered was canceled. Or at least delayed as of now. Growth continues to surprise on the upside. The 5%+ increase in interest rates was expected to slow down demand – and it has for larger purchases like cars and homes. Yet the services economy continues to chug along.

The Atlanta Fed publishes a real-time indicator of expected Gross Domestic Product growth. It is not the be-all-end-all, but a good indication of the trend. Economists came into the quarter expecting 0% growth. After July, the third quarter GDP is trending at 3.5% growth, well above expectations and the past two-quarters of growth. Betting against the American consumer is usually risky, and so far, it has not paid off.

Is the Economy Accelerating?

What We’re Reading

Inflation Undershoot? Narrative Shifts Again – Reuters
Small Caps Have Been a Big Story After Recessions – MSCI
Will Alternative Investments be in Your 401(k) Plan? – Institutional Investor
Everything Is Cyclical – Morgan Housel

Podcast of the Week

Brilliant Interview with Investment Thinker & Strategist Jawad Mian – Masters in Business

Last Week

Half of the S&P 500 companies reported earnings so far this quarter, outpacing estimates by 6%. Durable goods ordered spiked higher in June. Consumer prices falling to 3.0% from a year ago continues the trend of inflation downshifting.

The Past Week

The Week Ahead

On Thursday, we will see how services performed in the U.S. and globally. The jobs report comes out on Friday with 200,000 new jobs expected and a steady unemployment rate.

The Week Ahead

Thank you for reading.

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