Market Musings 6/9/2023
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Tentative markets gave way to bullish AI fervor to end May on a high…
Tentative start for markets in May slipping in the first half before the #AI rally took hold ending the month strong. Ultimately, the S&P 500 ended slightly higher－up +0.3% in May.
After April’s strong rally, market were very tentative starting May. Despite positive data points from the Fed meeting and April CPI data surprise upside, markets trended lower likely anxious given the strong YTD rally and #Recession2023 headwinds.
Then, Nvidia happened. Despite a very high bar, Nvidia blew out #AI buildout expectations with next quarter’s outlook growing over 50% Q/Q－crushing expectations. Any investor doubt about ChatGPT and generative #AI hype starting to seem unwarranted. Markets rally with the S&P 500 rising +2% in the 2H driven by Tech surging +8% followed by Comm up +4%.
While overall, June is off to a strong start with the S&P 500 up +3% as of this post. We’re starting to see the #AI sentiment cool after the strong May run. With some recent positive economic data, we’re seeing some rotation with Industrials, Consumer Discretionary and Financials leading so far this month.
We continue to see market strength being driven by investors hungry for the next bull market. It seems everything is being viewed through the lens of half full. Weakening economy? Good, let’s end #RisingYields. Strengthening economy? Great, soft landing for #Recession2023. We’re encouraged by the bullish market sentiment, but continue to be cautious of a growing disconnect with investor expectations.
We still believe the market is bottoming here, but likely trading in this range until better visibility on when #FallingYields start and the #Recession2023 impact. While we could see some market correction after the recent rallies, we still recommend adding to portfolios regularly here and definitely take advantage of any market pullback.
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As of the publish date, Ursa portfolios may own NVDA. The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.
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 Ursa’s full disclosures here.
Original Photo by Pixabay.