“When there’s uncertainty, stay centered on your plan. You don’t need to do anything dramatic.”
The market has shown a surprising amount of strength over the first seven months of the year, but uncertainty lies ahead. To provide clarity on what we can expect the rest of the year, Ryan O’Connell hosted the Q3 BTWM Virtual Lunch Webinar on August 10 at noon.
Topics discussed during the 40-minute webinar included:
- Brief market recap.
- What companies are outperforming and why.
- Is a recession still coming?
- Inflation and potential rate cuts.
- Q&A
- And more!
The S&P 500 ended July just shy of 4,600 (4,588). Despite trending down over the past couple of weeks, the S&P 500 remains up over 15% for the year. As discussed by Ryan during the webinar, over 70% of the S&P 500’s recent performance has come from just seven stocks. Including tech giants Apple and Microsoft. “I would rather see width and breadth rather than (high performance) from a select few,” says Ryan.
Ryan believes the performance of the market might be a sign that we’ve been “paid a little bit in advance.” He cautions that if earnings are revised lower, it would signal that a defensive strategy may become a popular approach for investing over the last few months of 2023.
As for 2024 and 2025, the future is bright. “I’m optimistic about where inflation is headed.” The Fed has been transparent about upcoming rate cuts, and the still very likely recession is not expected to last long. Inflation, which reached 9% last June, could get down to around 2.5% by the end of 2024. If the upcoming recession is brief, we could see a strong year in 2024.
Three questions came in during the webinar:
- When the Fed starts cutting (rates), will we see an immediate market response?
- Is AI just the dot-com bubble all over again?
- If you’re concerned about a recession, why not do more in money market accounts, fixed income (i.e. bonds), and/or CDs?
If you missed Ryan’s response to the above questions, each will be answered in upcoming posts.
BTWM Q4 Webinar
The Q4 BTWM Virtual Lunch Webinar is scheduled for Thursday, November 9 at noon. As always, there is no RSVP to join and all are welcome to attend. Watch the next webinar by using the following link https://www.gotomeet.me/RyanOConnell-BTWM, or by calling in at (669) 224-3413. Use access code 902-937-309.
Additional Tips & Quotes from Ryan O’Connell
“Don’t overconcentrate in one area…don’t overthink it.”
When the US dollar weakens, emerging markets strengthen.
In this market, it’s “hard to find quality companies that are on sale.”
“Watch for revisions to projected earnings. For prices to stay stable, they (earnings) have to do the heavy lifting.”
Have questions about the market? As always, if we can assist you in any way, don't hesitate to get in touch with Ryan at ryan.oconnell@bloomingtreewm.com.