Market Musings 7/4/2023

Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!

The S&P 500 enters a bull market with investors optimistic moderating economic data will lead to Goldilocks economic outcome…

The S&P 500 entered a new bull market in June bolstered by a pause in #RisingYields and moderating economic data. The S&P 500 finishes June up +6.5%.

Moderating jobs data kicked off the June rally. The May jobs report showed continued strength in new jobs, but unemployment also increased. Markets rallied seeing a good balance between softening employment trends but still healthy #LaborMarkets.

Then, the highly-anticipated Fed pause kicked off the second leg. After 10 consecutive rate hikes, the Fed held rates flat at the June meeting. The Fed tried to take a more hawkish stance expecting 2 more hikes this year. Despite the hawkish positioning, markets still optimistic more time will allow for more moderate economic signals to finally end #RisingYields.

The final June growth spurt came in the final week. Banks performed strongly on the Fed’s annual stress tests helping to dispel residual #BankingCrisis concerns. Meanwhile, more moderate economic signals continued to bolster a potential soft economic landing outcome. Investors optimistic for a balanced Goldilocks scenario๏ผjust enough economic pullback to end #RisingYields, but not enough to fall into a #Recession2023 hard landing.

Ursa’s portfolios in aggregate performed strongly in June. We saw strong outperformance in Consumer and Industrial names as economic forecasts rise on the balanced data. In addition, our Healthcare tilt benefited from some sector rotation after the #AI rally. We continue to strongly benefit from our portfolio’s positioning this year.

We’d still be a little cautious of markets here. It seems a lot of the near-term upside has already been priced-in with the S&P 500 up +16% YTD. We see further #RisingYields hikes and potential worsening economic data as market headwinds. We still recommend regular contributions to portfolios here, but look for market pullbacks for more advantageous opportunities.

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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursaโ€™s full disclosures here.

Original Photo by Chris.