July 2023

Chart of the Quarter

When looking at sector specific returns it is easy to see the commanding performance attribution from the technology sector. In June we experienced a rally in valuations against a backdrop of slowing or declining earnings. The price to earnings ratio is well above the historic mean and with chances of a recession on the horizon, the risk of missed earnings could lead to a retracement in the in the mega cap names. More specifically, 80% of the S&P return this year is from just 10 stocks. This leaves other sectors ripe for a leadership change in the second half of the year.