Milestone Market Update Summer 2023

July 05, 2023

The Milestone Team was happy to support the National Multiple Sclerosis Society at a recent fundraising event at The Iron Pigs stadium! The MS Society's mission is to cure MS while empowering people affected by MS to live their best lives.

Market Update

After a tough 2022, investors finally have some good news! Most of the major market indexes are up to start the year with the tech heavy Nasdaq leading the way.

The Fed has made substantial progress in its fight against inflation as the Consumer Price Index (CPI) has cooled from a high of 9.1% in June of last year to 4.0% currently. That is still above its 2% target, but it’s moving in the right direction. Given the progress, they recently announced that they would pause their interest rate increases but left the door open for future increases if inflation were to roar back.

CPI Constant Contact

Many of the supply issues that helped create high inflation are now largely resolved, at least for the time being. Lumber prices, which soared during COVID, are now down 53.5% from the peak in May of 2021. While higher interest rates and low supply of homes are challenging the housing market, these lower lumber prices are leading consumers to build more houses as housing starts have increased 21.7% year-to-date.

Lumber Prices:

Lumber Constant Contact

Housing Prices:

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Energy prices, which spiked at the onset of the Russia/Ukraine war, have now come back down with oil declining 38% over the last year.

Oil Prices:

Oil Constant Contact

Corporate earnings have also remained strong as companies in the S&P 500 reported earnings that were double analysts’ expectations in the first quarter. The U.S. consumer remains strong and employed, as the unemployment rate remains historically low at 3.7%. This has caused many analysts and investment institutions like JPMorgan and Goldman Sachs to reduce their probability of recession to 25% (half of what it was entering the year).

Could we be experiencing the most widely anticipated recession that never happens? Time will tell if we do enter recession in 2023, but the market is signaling that if we do, it will likely be mild and short lived.

While it would be great to know what the future holds, history tells us a diversified portfolio aligned with your financial goals is the next best thing.

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What does this mean for you?

1. With the Fed dramatically raising interest rates, money market funds are now paying above 4.5%. If you have more than six months of savings in your bank account, you could consider investing that money to receive a higher interest rate.

2. If you have money that you don’t think you’ll need for the next 3-5 years, consider investing it for growth as the market begins to recover from last year’s large declines.

Update to Virtual Meetings:

For clients that prefer online/video meetings, please note that effective 7/1, we have changed platforms from Zoom to Microsoft Teams.

You will still receive a link to access the meeting via web browser, and no additional downloads are required.

If you have questions, please let us know.

We hope you have a great summer and can enjoy time with your loved ones! Dave and family just returned from a trip to Quebec. The kids aren’t so little anymore!

Dave Family Constant contact