Investment Conditions and Outlook
July 18, 2023
July 2023 Investment Conditions & Outlook Executive Summary As we wrap up the first half of the year, we remain impressed with the economic resiliency and subsequent retracement of global stocks. Much like last quarter the equity market bounce has remained narrow and led by a single sector. The technology sector continued to be the significant driver of market performance. Companies involved in areas such as cloud computing, e-commerce, digital payments, and artificial intelligence attracted considerable investor attention and valuation expansion. However, regulatory scrutiny and concerns over valuation levels impact our view on this sector going forward. If the strength of the recovery had been broad based, with many stocks making gains, it would be easier to call this a new bull market. But the opposite remains true. Historically, early cycle bull markets tend to be led by economically sensitive segments of the market, mainly small and micro-cap companies. The weakness in these segments this year does not support a new bull market. It could also be that a new bull market, albeit one that does not look like past bull markets, is quietly underway and we must wait to see how it plays out. We remain at target/neutral equity […]
