M&M Wealth Managment

June 2023 Monthly Market Insight

Guiseppi Morabito -

U.S. Markets

Stock prices were mixed as enthusiasm over the economic potential of artificial intelligence was offset by concerns about the federal debt ceiling.

The Dow Jones Industrial Average lost 3.49 percent, while the Standard & Poor’s 500 Index notched a slight gain, adding 0.25 percent. The Nasdaq Composite led, picking up 5.80 percent.1

The MSCI-EAFE Index slid 4.76 percent in May as Germany’s economy entered a recession and China’s most recent reopening efforts struggled.7

European markets were under pressure most of the month. At the end of May trading, France lost 5.24 percent, the U.K. dropped 5.39 percent, and Italy fell 3.79 percent.8

Pacific Rim markets mixed. China’s Hang Seng index dropped 8.35 percent, while Japan’s Nikkei rose 7.04 percent.9


Indicators

Gross Domestic Product (GDP)

The second estimate of first-quarter GDP growth was revised higher, from 1.1 percent to 1.3 percent.10

Employment

Employers added 253,000 jobs in April, as the unemployment rate fell to 3.4 percent. Wages rose 4.4 percent year over year. April’s job growth number was offset by a downward revision of 149,000 in the February and March estimates.11

Retail Sales

Retail sales increased 0.4 percent in April, up from a revised 0.7 percent decline in March. It was the first increase since January.12

Industrial Production

Industrial production rose 0.5 percent in April, led by an increase in manufacturing activity. Capacity utilization rose to 79.7 percent, in line with its long-term average.13

Housing

Housing starts climbed 2.2 percent, an encouraging report that was offset by a downward revision of the March number.14

Sales of existing homes fell 3.4 percent in April and were lower by 23.2 percent from a year earlier. The median price of existing home sales fell 1.7 percent from April 2022, the largest year-over-year decline in more than 11 years.15

New home sales gained 4.1 percent. Economists expected a 2.0 percent decline. Sales of new homes were 11.8 percent above those of April 2022.16

Consumer Price Index (CPI)

Year-over-year inflation cooled to 4.9 percent, down slightly from March’s 5.0 percent increase. It was the tenth straight month in which price inflation fell. April’s monthly increase in prices was 0.4 percent, which was in line with expectations, although higher than the 0.1 percent increase in March.17

Durable Goods Orders

New orders for durable goods rose 1.1 percent in April, beating the consensus forecast of a decline of 0.8 percent. The gains were driven by defense spending and business investment.18

The Fed


After raising interest rates by 0.25 percent at the start of May, the minutes from the Federal Open Market Committee indicated a division among committee members over whether further rate hikes would be necessary.19

The majority of them signaled that they were ready for a pause. Members supporting another rate hike believed that the progress on inflation was moving too slowly in reaching the Fed’s target inflation rate of 2 percent.19

1. WSJ.com, May 31, 2023

2. CNBC.com, May 31, 2023

3. Insight.FactSet.com, May 26, 2023

4. Insight.FactSet.com, May 26, 2023

5. SectorSPDR.com, May 31, 2023

6. CMEGroup.com, May 31, 2023

7. MSCI.com, May 31, 2023

8. MSCI.com, May 31, 2023

9. MSCI.com, May 31, 2023

10. TradingEconomics.com, May 25, 2023

11. CNBC.com, May 5, 2023

12. CNBC.com, May 16, 2023

13. Reuters.com, May 16, 2023

14. Reuters.com, May 17, 2023

15. CNBC.com, May 18, 2023

16. Finance.Yahoo.com, May 23, 2023

17. CNBC.com, May 10, 2023

18. Census.gov, May 26, 2023

19. Reuters.com, May 24, 2023