Markets, Great Start to 2023!

It’s no secret the inflation numbers over the last several months are pointing in a desirable direction.  Will this continue?? Let’s hope so!

Stocks and bonds are wanting to price in a “soft” economic landing, meaning either no recession, or a very mild one.

So far, off to the races!!

Last week, the Dow jumped 2.01%, the S&P 500 2.71%, the Nasdaq 4.83%, and the Russell 2000 3.4%.  Over the pond (with the dollar is reversing course), witnessed foreign stocks jumping 4.25% and emerging markets up 4.16%. 

Bond prices are also up YTD 2.74%, according to the Bloomberg Aggregate Bond Index.

Growth and value stocks (both large and small cap) are moving up in tandem, which has not happened for quite some time!

Corporate Profits?

Last week we heard from four of the large banks that beat earnings estimates, providing additional optimism.  Now we’ll hear a plethora of reports from various industries.  What is said about forward projections will be very telling.

As of now, consumers are spending more money on travel and leisure and less on “products.”  Perhaps we are “purchased out” from the pandemic.  I certainly am in that camp as I’m writing this blog while on a brief vacation.  The island and hotels are packed with people from all over the world!  Judging from my location, the global economy is humming along. Hmmm!

Profits, in my opinion, have to slow as wages have increased significantly. 

I can only hope the Federal Reserve members can navigate rates in the proper way so we do in fact have a soft landing, without significant economic and market damage.

2022 EV Sales

According to the Wall Street Journal, EV sales last year accounted for 10% of new vehicles sold, which is the high watermark so far. 

In Europe, EV’s accounted for 11% and in China, 19%.  The US is lagging behind, with EV sales accounting for approximately 5.8% in 2022.

Tesla was the largest seller in the US (not surprising), followed by Ford and Hyundai, and it’s affiliate, Kia.  General Motors actually lost market share in 2023.

Last year, US dealerships had record profits because of pricing power.  Most expect to sell more cars this year with less profit.

The automobile and housing industries are good barometers of economic activity because of the obvious size of respective purchases!

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