NEI Monthly Market Insights: June 2023

Jul 17, 2023

Markets continue to rally through June

Equity markets had another positive month as the S&P 500 was up 6% in June, bringing year-to-date returns to 14.5%, while the Nasdaq is officially back in bull market territory, up 36.7% year-to-date. Equity markets were up across the board in Europe, Canada, Japan, and Emerging Markets while China was down for the month. Better-than-expected economic conditions in the first half of 2023 has also contributed to this dynamic. The U.S. Economic Surprise Index has surged, indicating that economic data releases have been coming in above consensus forecasts. The previous concerns about an impending recession seem to have diminished, or at least expectations for a recession have been pushed out further to a later date. Fixed income markets ended the month lower as yields surged on strong economic data, raising expectations that central banks will need to stay hawkish for longer.

The NEI perspective

U.S. market rallied past the trading range ceiling of 4200 that it had previously and entered a technical bull market after returning over 24% since hitting a low in October. While the performance of AI exposed mega-cap technology companies has led the markets, the rally has recently broadened.

Market strength buoys investment sentiment as market sentiment has shifted from having more investors in the bearish camp, to having the majority of investors turning bullish over the past few months. In June, bullish sentiment was at its highest level since November 2021.

How sustainable is this rally? Excess savings, a tight labour market, reasonable valuations (outside of the mega cap technology companies) and the low bar set for earnings expectations indicate that the market may continue to rally in the near term.

Read more…

Recent Posts

Aviso Weekly Market Monitor: February 19th – February 23rd

Market developments Equities: The equity markets reached new all-time highs this week, with the S&P 500 and NASDAQ indices climbing by 1.66% and 1.40% respectively, marking a continued upward trajectory in investor sentiment and market performance. This positive...

NEI Monthly Market Insights: January 2024

Markets staged a remarkable November rally Following the “almost everything rally” that characterised the final few months of 2023, performance across asset classes was mixed in January. In the U.S., the S&P 500 Index was propelled to record highs as optimism...

Aviso Weekly Market Monitor: February 12th – February 16th

Market developments Equities: This week, the S&P 500 experienced a slight decline, closing at 5,005.57, a drop of 0.42%. Despite a run-up to the CPI report, equity markets showed restraint, with the S&P 500 wavering around the 5,000 level amidst mixed signals...

Aviso Weekly Market Monitor: February 5th – February 9th

Market developments Equities: The S&P 500 reached a record high, heading towards its fifth consecutive week of gains, driven by optimism around a soft landing and excitement over artificial intelligence. Technology stocks led the surge, with the Nasdaq 100 rising...

Active vs. Passive Investing: Which strategy is right for you?

Investing can be confusing, especially when it comes to choosing the right strategy. Many investors fall into two categories: active and passive. But what do those terms actually mean? Active investing aims to outperform the market and beat the competition by making...

Aviso Weekly Market Monitor: January 29th – February 2nd

Market developments Equities: The stock market extended gains, reaching all-time highs with the S&P 500 above 4,950 and the Nasdaq up 1.5%. Positive outlooks from Meta Platforms Inc. and Amazon.com Inc. contributed to the rally. Economic optimism overshadowed...