Hopeful signs in the economic malaise

Financial Strategies

It is di cult to see a way out of the current economic malaise. e markets are up, then they are down. ere will be a new debt ceiling but at what cost? We have been hearing about a recession for over a year but now some economists are backpedaling. What is going on and how do investors navigate these clouds? Oh, and the weather is not helping the mood much either.

We are dealing with one of the rainiest spring seasons on record, one of the highest federal de cits in history and the longest anticipated recession ever. No wonder no one wants to start a new job, buy a house, or invest in virtually anything.

But there are some green shoots. e stock market seems immune to most of the bad news based on the ve tech stocks leading the returns. If you look under the hood, many average stock prices are down in value so far this year despite the broad markets buoyed by a few stocks that were hit hard last year, namely Apple, Nvidia, Microsoft, Amazon and Alphabet. ese ve stocks are the largest market-cap names in the S&P 500 representing 24.7% of the overall weight of that index.¹

Despite the mixed signals investors are experiencing, it may be helpful to hear some positive facts to lighten the heavy political and economic news lately.²

• In ation has calmed down in 2023.

• Corporate earnings were better than expected in the rst quarter.

• We continue to see strong employment levels.

• Retirees are bene ting from the previous government payments and the higher interest rates on bond portfolios.

• Capital spending is holding up given the infrastructure spending bills passed to keep our technology sector competitive, restore our infrastructure and incent re-onshoring of companies’ supply chains.

• Consumer spending has increased, especially on travel and entertainment.

• e economy is experiencing pockets of weakness this cycle, unlike the boom-and-bust periods