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2023 Midyear Outlook Client Letter

July 11, 2023 Dear Valued Investor, Now that we’re beyond the midpoint of the investing year, it’s a great time to look at where we’ve been—to help position your portfolio for the latter half of the year. Our Midyear Outlook: The Path Toward Stability does this with in-depth analyses, insights and perspectives from the LPL […]

August 2, 2023/by casey

2023 Midyear Outlook

Client Letters

Read the full report here. Here are the highlights from this edition of Midyear Outlook 2023: Even amid a strong labor market, small businesses plan to slow expansion plans as the Federal Reserve (Fed) maintains steadfast on price pressures. This could, in turn, cause the economy to soften. We expect inflation to ease as supply […]

July 12, 2023/by Casey Jurinske

2023 Midyear Outlook Client Letter

Client Letters

August 2, 2023/by casey

2023 Midyear Outlook

Client Letters

July 12, 2023/by Casey Jurinske

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2023 Midyear Outlook Client Letter

Client Letters

July 11, 2023

Dear Valued Investor,

Now that we’re beyond the midpoint of the investing year, it’s a great time to look at where we’ve been—to help position your portfolio for the latter half of the year. Our Midyear Outlook: The Path Toward Stability does this with in-depth analyses, insights and perspectives from the LPL Research team. Today we’re bringing you a few of its key highlights.

Our investing outlook started with a theme of returning to normalcy and finding balance. And while that theme will carry us through year-end, the year has come with some challenges. We saw it in the banking sector with three large bank failures in the spring, followed by up-to-the-deadline debate about the debt ceiling. Yet, despite the market gyrations these events caused, the overall financial system seems stable. Some bright spots include:

Inflation is under 5% at home, significantly lower than its 8.3% level this time last year
The fed funds rate is approaching its apex as the Federal Reserve (Fed) grapples with the unknown impacts yet to emerge from its aggressive tightening cycle
Global inflation has ticked down from its 8.7% high in 2022, and is following a slow descent to a projected 6.5% for 2023

These bright spots help shape our view on the next six months, which may come with some potential opportunities in international equities, core bonds, and industrials. Balancing things out, there are unknowns still out there—like recession and interest-rate volatility. The Fed has already indicated they may raise rates further if inflation continues to remain stubbornly high. On the other hand, rates could see a fairly sizable drop in the event of recession. What’s key here is how rate volatility resolves itself, as that will be a big driver for markets.

And while we don’t know the answer to that yet, we know that the insights found in the report will help position investors, along with guidance from their financial professional, to achieve their goals. And of course, our seasoned team of experts will be by your side, providing guidance and actionable insights as the second half unfolds.

Please reach out to me if you have any questions.

Sincerely,

Wayne Rigney

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Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of July 5, 2023.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

For a list of descriptions of the indexes and economic terms referenced, please visit our website at lplresearch.com/definitions.

August 2, 2023/by casey

2023 Midyear Outlook

Client Letters

Read the full report here.

Here are the highlights from this edition of Midyear Outlook 2023:

Even amid a strong labor market, small businesses plan to slow expansion plans as the Federal Reserve (Fed) maintains steadfast on price pressures. This could, in turn, cause the economy to soften.

We expect inflation to ease as supply chains conditions have improved. Labor markets have been strong as companies have struggled to find qualified workers.

Post-pandemic purchasing dynamics could soon move to pre-pandemic levels where services, not goods, may be the major focus for consumers.

Given present central bank’s focus on price pressures and the risks of recession, stock market indicators are pointing toward better returns. This is a reason why it can be important for clients to maintain a long-term posture with equities.

When looking at the equity risk premium from a valuation perspective, which compares the earnings yield for equities (earnings divided by price) to the yields on bonds (we use the 10-year Treasury), bonds appear more attractive than equities. Presently, the equity risk premium is sitting at its long-term average.

We expect earnings to be around 213 for the S&P 500 Index this year. Second quarter earnings reports are going to be announced shortly, and this estimate could be subject to change amid disinflationary conditions.

July 12, 2023/by Casey Jurinske

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Copyright © Rigney Financial Services, LLC. All rights reserved. Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states and territories: AL, AK, AZ, AR, CA, CO, CT, DC, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT, VT, VA, VI, WA, WV, WI, WY

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2023 Midyear Outlook Client Letter

2023 Midyear Outlook

2023 Midyear Outlook Client Letter

2023 Midyear Outlook

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2023 Midyear Outlook Client Letter

2023 Midyear Outlook

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