Markets “In a Nutshell” for July 3, 2023
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.00%, the S&P 500 was up 2.30%, and the NASDAQ rose 2.20%. Foreign stocks (MSCI EAFE) were also up, rising 1.6%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 3.83%. (Data source: Wall Street Journal)
1st Half Recap
Last week closed the books on a strong 1st half for equities as the S&P 500 is up over 15% for the year and the NASDAQ over 31%. This has been the opposite start compared to last year as stocks were down 20% at this point last year. This rally to start this year has been backed by a positive outlook on Fed policy and inflation coming down. The economy also has seemed to stay resilient despite the rate hikes we have seen since March of 2022. The market also has been able to absorb the banking concerns that we saw earlier in the year as multiple banks collapsed. Despite the strong rally, the market remains 7% off the all-time high we saw on January 3, 2022. The market rally has also seen very little volatility as there have only been 2 days this year where the market has moved 2% in either direction. The volatility index is at the lowest it has been since January of 2020 and while investors won’t complain about a slow climb up, volatility can always pick up with a new headline that shifts market expectations.
Growth Continues to Outperform
Growth stocks have continued to lead the way in the 1st half of the year. The NASDAQ, which is mainly made up of growth companies, is up over 31% compared to the Dow Jones which is up 3% for the year. Apple just hit a $3 trillion market cap being the first company to do so. NVIDIA has surpassed $1 billion after increasing 200% in just the first half of 2023. These mega-cap growth companies have been the main reason for the market’s move higher as the top 10 companies in the S&P 500 make up over 30% of the entire 500 company index. The technology sector is now up over 40% for 2023 as rates have stabilized and could begin to come down as the Fed pauses and possibly cuts rates by the end of this year or early next.
What is the 2nd largest company by market cap in the United States? (Scroll Down for Answer)
Have a Great Week!
1. Microsoft. The only company other than Apple with a $2 trillion market cap is Microsoft. Amazon is the next largest but still worth almost ½ of Microsoft.