Stocks took a breather last week as investors digested the previous week’s surge and the month-to-date solid gains.
The Dow Jones Industrial Average lost 1.67%, while the Standard & Poor’s 500 fell 1.39%. The Nasdaq Composite index dropped 1.44% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 2.00%.1,2,3
The stock market drifted lower last week as the tug-of-war between bulls and bears played out in a week that was light on market-moving news. The equity market headed lower to start holiday-shortened trading week, and continued to trade with a heavy tone on Wednesday as bad earnings and guidance from FDX and WGO rekindled worries about the health of the global economy and U.S. consumer.
Stocks rebounded on Thursday to recover some of the week’s losses and looked past Congressional testimony by Fed Chair Powell, who said two more rate hikes are likely in the wake of interest rate hikes by central bankers in the U.K., Switzerland, Norway, and Turkey. However, Thursday was a notable tipping point for general market expectations as a focus on inflation and soft-landing hopes gave way to recession fears being the dominant theme.
The decline in stock prices continued into Friday, fueled by global growth fears from new economic data indicating more robust economic slowdowns in the eurozone, Japan, and Australia.The robust Chinese economic recovery that was expected is failing to materialize and stimulus efforts by the PBOC have been met with a yawn by investors. Accordingly, the outlook for the global economy deteriorated last week and central banks are poised to continue with tightening campaigns, raising interest rates to thwart inflation while will further dampen global growth.
Over the weekend the head of the Wagner Group, Yevgeny Prigozhin, lead a rebellious march towards Moscow after he accused the Russian government of missile attacks on his private army. His troops “captured” several Russian cities and came within 200 miles of Moscow. However, Prigozhin turned his troops around after an agreement for Wagners’ soldiers and his safety was reached (can Putin be trusted?). Politically, this is the biggest threat to Putin’s leadership ever, and it just underscores the total disaster of the war on Ukraine.
Housing Sentiment Improves
Home builders' confidence edged into positive territory for the first time in 11 months, aided by strong demand, low inventory, and a recovering supply chain. May’s new home sales, which rose 21.7%–the most significant percentage gain since October 2016, validated this confidence. The number of new home starts in May (1.63 million) hit a 13-month high, with both single- and multi-family homes up substantially.4,5
Sales of existing homes in May rose 0.2% month-over-month while declining 20.4% from a year ago. The existing home market continues to suffer from low inventory and still-high prices. The median price of a home sold in May declined 3.1% year-over-year to $396,100.6
This Week: Key Economic Data
Tuesday: Durable Goods Orders. New Home Sales.
Thursday: Gross Domestic Product (GDP). Jobless Claims.
Friday: Personal Income and Outlays. Consumer Sentiment.
Source: Econoday, June 23, 2023
This Week: Companies Reporting Earnings
Tuesday: Walgreens Boots Alliance, Inc. (WBA).
Wednesday: Micron Technology, Inc. (MU), General Mills, Inc. (GIS).
Thursday: Nike, Inc. (NKE), McCormick & Company, Inc. (MKC)
Source: Zacks, June 23, 2023
"There is no better compass than compassion."
– Amanda Gorman
Couples Who Work Together, Tax Together
When a household starts a business, couples find themselves learning about the tax responsibilities related to that business. There are some things to consider when working together.
Here are a few items to consider:
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Eat This, Not That: Easy Food Swaps Anyone Can Do
Eating healthier doesn’t have to be hard! You might not have to make any significant changes to your current diet! You can cut the bad stuff by swapping out unhealthy options for healthier picks and still enjoy your meal. Here are some of our favorite food swaps:
Many healthy swaps like these can help you reduce your caloric intake, consume less sugar, and make it easy to create a more balanced meal.
You hold 3 U.S. coins in your hand. None of them are dimes, pennies, or quarters. They total 60¢. What 3 coins do you have in hand?
Last week’s riddle: A major league pitcher faces just 27 hitters in a baseball game. He retires all of them, allowing no runs and no hits. Still, his team loses the game 4-0. How is this possible? Answer: He was a relief pitcher.
Lake Tekapo & Lupin Field, New Zealand
Footnotes and Sources
2. The Wall Street Journal, June 23, 2023.
3. The Wall Street Journal, June 23, 2023.
4. National Association of Home Builders, June 19, 2023
5. Reuters, June 20, 2023.
6. CNBC, June 22, 2023.
7. IRS.gov, February 22, 2023
8. EatThis.com, February 15, 2023
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