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MONTHLY MARKET INSIGHTS | JUNE 2023


U.S. MARKETS

Stock prices were mixed as enthusiasm over the economic potential of artificial
intelligence was offset by concerns about the federal debt ceiling.

The Dow Jones Industrial Average lost 3.49 percent, while the Standard & Poor’s
500 Index notched a slight gain, adding 0.25 percent. The Nasdaq Composite led,
picking up 5.80 percent.1

The people who are crazy enough to think they can change the world are the ones
who do.

Steve Jobs, American business magnate and innovator of Apple’s 1997 “Think
Different” campaign


PREVAILING HEADWINDS

Stocks navigated several headwinds, including talk of another Fed rate hike,
concerns about regional banking stresses, and ongoing recession fears. But the
most challenging headwind for the market was the uncertainty surrounding the
national debt ceiling.


DEBT CEILING TALKS

The political brinkmanship surrounding the talks was unsettling for the
financial markets. Stocks were held captive to the ebb and flow of updates,
falling when lawmakers’ talks faltered and rising when an agreement seemed near.
As the month closed, the debt ceiling measure appeared close to the finish
line.2


UPBEAT CORPORATE REPORTS

One source of support for stocks last month was first-quarter corporate reports,
which exceeded the market’s low expectations. With 97 percent of the companies
comprising the S&P 500 reporting, 78 percent reported a positive earnings
surprise. This is the best performance relative to Wall Street estimates since
the fourth quarter of 2021.


AI MOVEMENT

This corporate earnings season ushered in a dramatic development—a heightened
focus on artificial intelligence (AI). In an analysis of earnings calls, 110
companies mentioned AI, representing a 40 percent increase from the fourth
quarter.4

One mega-cap chip company reported above-consensus earnings along with strong
guidance due to its AI-related business, igniting investor enthusiasm that
rippled across the technology and communication services sectors as May came to
a close.4


SECTOR SCORECARD

Three industry sectors ended the month with gains: Communications Services
(+4.87 percent), Consumer Discretionary (+3.54 percent), and Technology (+10.39
percent). Losses were seen in Consumer Staples (–5.89 percent), Energy (–8.13
percent), Financials (–2.18 percent), Healthcare (–4.42 percent), Industrials
(–1.12 percent), Materials (–5.26 percent), Real Estate (–3.99 percent), and
Utilities (–6.55 percent).5

U.S. Market Recap for May 2023

S&P 500 0.25 Month (%) ‌ 8.86 Year-to-Date (%)

Nasdaq 5.80 Month (%) ‌ 23.59 Year-to-Date (%)

Russell 1000 0.28 Month (%) ‌ 8.54 Year-to-Date (%)

10-Year Treasury 3.64 Month (%) ‌ –0.24 Year-to-Date (%)

Yahoo Finance, May 31, 2023. The market indexes discussed are unmanaged and
generally considered representative of their respective markets. Individuals
cannot directly invest in unmanaged indexes. Past performance does not guarantee
future results. U.S. Treasury Notes are guaranteed by the federal government as
to the timely payment of principal and interest. However, if you sell a Treasury
Note prior to maturity, it may be worth more or less than the original price
paid.


WHAT INVESTORS MAY BE TALKING ABOUT IN JUNE

The Federal Open Market Committee (FOMC) will close its two-day meeting on June
14 and update investors on the direction of short-term rates.

At its May 2023 meeting, the FOMC announced a 25 basis point hike, adding that
Committee members may decide to pause on future rate hikes, depending on fresh
economic data and prevailing financial conditions.

But the market believes that the Fed will raise interest rates at least another
25 basis points this summer, perhaps as soon as this month.6

FOMC meetings have been important events in the markets for the last two years,
and this upcoming one is no different.


WORLD MARKETS

The MSCI-EAFE Index slid 4.76 percent in May as Germany’s economy entered a
recession and China’s most recent reopening efforts struggled.7

European markets were under pressure most of the month. At the end of May
trading, France lost 5.24 percent, the U.K. dropped 5.39 percent, and Italy fell
3.79 percent.8

Pacific Rim markets mixed. China’s Hang Seng index dropped 8.35 percent, while
Japan’s Nikkei rose 7.04 percent.9

World Market Recap for May 2023 Emerging Markets May (%) Year-to-Date (%) Hang
Seng (China) –8.35 –7.82 KOSPI (Korea) 3.02 15.24 Nikkei (Japan) 7.04 18.37
Sensex (India) 2.47 2.93 EGX 30 (Egypt) –0.97 19.85 Bovespa (Brazil) 3.74 –1.73
IPC All-Share (Mexico) –4.33 8.82 ASX 200 (Australia) –2.98 0.75 Europe     DAX
(Germany) –1.62 12.50 CAC 40 (France) –5.24 9.65 IBEX 35 (Spain) –2.06 9.98 FTSE
100 (United Kingdom) –5.39 -0.08 IT40 (Italy) –3.79 9.89 Yahoo Finance, May 31,
2023. The market indexes discussed are unmanaged and generally considered
representative of their respective markets. Individuals cannot directly invest
in unmanaged indexes. Past performance does not guarantee future results.
International investments carry additional risks, which include differences in
financial reporting standards, currency exchange rates, political risks unique
to a specific country, foreign taxes and regulations, and the potential for
illiquid markets. These factors may result in greater share price volatility.


INDICATORS


GROSS DOMESTIC PRODUCT (GDP)

The second estimate of first-quarter GDP growth was revised higher, from 1.1
percent to 1.3 percent.10


EMPLOYMENT

Employers added 253,000 jobs in April, as the unemployment rate fell to 3.4
percent. Wages rose 4.4 percent year over year. April’s job growth number was
offset by a downward revision of 149,000 in the February and March estimates.11


RETAIL SALES

Retail sales increased 0.4 percent in April, up from a revised 0.7 percent
decline in March. It was the first increase since January.12


INDUSTRIAL PRODUCTION

Industrial production rose 0.5 percent in April, led by an increase in
manufacturing activity. Capacity utilization rose to 79.7 percent, in line with
its long-term average.13


HOUSING

Housing starts climbed 2.2 percent, an encouraging report that was offset by a
downward revision of the March number.14

Sales of existing homes fell 3.4 percent in April and were lower by 23.2 percent
from a year earlier. The median price of existing home sales fell 1.7 percent
from April 2022, the largest year-over-year decline in more than 11 years.15

New home sales gained 4.1 percent. Economists expected a 2.0 percent decline.
Sales of new homes were 11.8 percent above those of April 2022.16


CONSUMER PRICE INDEX (CPI)

Year-over-year inflation cooled to 4.9 percent, down slightly from March’s 5.0
percent increase. It was the tenth straight month in which price inflation fell.
April’s monthly increase in prices was 0.4 percent, which was in line with
expectations, although higher than the 0.1 percent increase in March.17


DURABLE GOODS ORDERS

New orders for durable goods rose 1.1 percent in April, beating the consensus
forecast of a decline of 0.8 percent. The gains were driven by defense spending
and business investment.18


THE FED

After raising interest rates by 0.25 percent at the start of May, the minutes
from the Federal Open Market Committee indicated a division among committee
members over whether further rate hikes would be necessary.19

The majority of them signaled that they were ready for a pause. Members
supporting another rate hike believed that the progress on inflation was moving
too slowly in reaching the Fed’s target inflation rate of 2 percent.19


BY THE NUMBERS: WORLD BLOOD DONOR DAY ON JUNE 14TH


118.5 MILLION20

Number of blood donations collected globally


40 PERCENT20

Percentage donated by high-income countries like the U.S.


54 PERCENT20

Percentage of donations given to children under 5 years of age in low-income
countries


76 PERCENT20

Percentage of donations given to patients over 60 years of age in high-income
countries


90 PERCENT20

Percentage of blood donations collected from unpaid donors in countries like the
U.S.


37.4 PERCENT21

Percentage of people with O-positive blood


35.7 PERCENT21

Percentage of people with A-positive blood


8.5 PERCENT21

Percentage of people with B-positive blood


6.6 PERCENT21

Percentage of people with O-negative blood


6.3 PERCENT21

Percentage of people with A-negative blood


3.4 PERCENT21

Percentage of people with AB-positive blood


1.5 PERCENT21

Percentage of people with B-negative blood


0.6 PERCENT21

Percentage of people with AB-negative blood

--------------------------------------------------------------------------------

 

The content is developed from sources believed to be providing accurate
information. The information in this material is not intended as tax or legal
advice. Please consult legal or tax professionals for specific information
regarding your individual situation. This material was developed and produced by
FMG Suite to provide information on a topic that may be of interest. FMG Suite,
LLC, is not affiliated with the named representative, broker-dealer, or state-
or SEC-registered investment advisory firm. The opinions expressed and material
provided are for general information and should not be considered a solicitation
for the purchase or sale of any security.

Investing involves risks, and investment decisions should be based on your own
goals, time horizon and tolerance for risk. The return and principal value of
investments will fluctuate as market conditions change. When sold, investments
may be worth more or less than their original cost.

Any companies mentioned are for illustrative purposes only. It should not be
considered a solicitation for the purchase or sale of the securities. Any
investment should be consistent with your objectives, timeframe, and risk
tolerance.

The forecasts or forward-looking statements are based on assumptions, subject to
revision without notice, and may not materialize.

The market indexes discussed are unmanaged and generally considered
representative of their respective markets. Individuals cannot directly invest
in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally
considered representative of large-capitalization companies on the U.S. stock
market. The S&P 500 Composite Index is an unmanaged group of securities
considered to be representative of the stock market in general. The Nasdaq
Composite is an index of the common stocks and similar securities listed on the
Nasdaq stock market and considered a broad indicator of the performance of
stocks of technology and growth companies. The Russell 1000 Index is an index
that measures the performance of the highest-ranking 1,000 stocks in the Russell
3000 Index, which is comprised of 3,000 of the largest U.S. stocks. The MSCI
EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves
as a benchmark for the performance in major international equity markets, as
represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia.
Index performance is not indicative of the past performance of a particular
investment. Past performance does not guarantee future results. Individuals
cannot invest directly in an index. The return and principal value of stock
prices will fluctuate as market conditions change. And shares, when sold, may be
worth more or less than their original cost.

International investments carry additional risks, which include differences in
financial reporting standards, currency exchange rates, political risks unique
to a specific country, foreign taxes and regulations, and the potential for
illiquid markets. These factors may result in greater share price volatility.

The Hang Seng Index is a benchmark index for the blue-chip stocks traded on the
Hong Kong Stock Exchange. The KOSPI is an index of all stocks traded on the
Korean Stock Exchange. The Nikkei 225 is a stock market index for the Tokyo
Stock Exchange. The SENSEX is a stock market index of 30 companies listed on the
Bombay Stock Exchange. The Jakarta Composite Index is an index of all stocks
that are traded on the Indonesia Stock Exchange. The Bovespa Index tracks 50
stocks traded on the Sao Paulo Stock, Mercantile, & Futures Exchange. The IPC
Index measures the companies listed on the Mexican Stock Exchange. The MERVAL
tracks the performance of large companies based in Argentina. The ASX 200 Index
is an index of stocks listed on the Australian Securities Exchange. The DAX is a
market index consisting of the 30 German companies trading on the Frankfurt
Stock Exchange. The CAC 40 is a benchmark for the 40 most significant companies
on the French Stock Market Exchange. The Dow Jones Russia Index measures the
performance of leading Russian Global Depositary Receipts (GDRs) that trade on
the London Stock Exchange. The FTSE 100 Index is an index of the 100 companies
with the highest market capitalization listed on the London Stock Exchange.

Please consult your financial professional for additional information.

Copyright 2023 FMG Suite.

1. WSJ.com, May 31, 2023

2. CNBC.com, May 31, 2023

3. Insight.FactSet.com, May 26, 2023

4. Insight.FactSet.com, May 26, 2023

5. SectorSPDR.com, May 31, 2023

6. CMEGroup.com, May 31, 2023

7. MSCI.com, May 31, 2023

8. MSCI.com, May 31, 2023

9. MSCI.com, May 31, 2023

10. TradingEconomics.com, May 25, 2023

11. CNBC.com, May 5, 2023

12. CNBC.com, May 16, 2023

13. Reuters.com, May 16, 2023

14. Reuters.com, May 17, 2023

15. CNBC.com, May 18, 2023

16. Finance.Yahoo.com, May 23, 2023

17. CNBC.com, May 10, 2023

18. Census.gov, May 26, 2023

19. Reuters.com, May 24, 2023

20. WHO.int, May 26, 2022

21. Healthline.com, February 28, 2022

--------------------------------------------------------------------------------

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The content is developed from sources believed to be providing accurate
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regarding your individual situation. Some of this material was developed and
produced by FMG Suite to provide information on a topic that may be of interest.
FMG Suite is not affiliated with the named representative, broker - dealer,
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material provided are for general information, and should not be considered a
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FMG# 2021-130274 Exp 02/24