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Weekly Economic and Stock Market Commentary – June 20, 2023


As for the stock market specifically:

The quadruple witching experience of last week brought good news with all the major market averages moving up multiple percentage points.

Something good that occurred last week was the movement of US stocks compared to the six macro asset classes I track… US stocks overtook commodities as the second strongest asset class of the six. For those interested, the rankings from strongest to weakest are International Equities, US Equities, Commodities, Cash, Fixed Income, and Currencies.

This is NOT a prediction. Client returns tend to be much stronger when US stocks are the first or second strongest asset class. Kreskin will have to give you his prediction, while the rest of us wait for reality.

The bullish percent risk indicators had another good week. Each rose by more than 2 percentage points. We have good field position, and things look good today. WEALTH ACCUMULATION strategies are in place at this time.

Remember, X’s mean OFFENSE or wealth accumulation, while O’s mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of June 16, 2023 (Courtesy Dorsey, Wright, and Associates).

On a general note:

The Department of Labor announced that inflation during May rose 4.0% compared to May 2022. The inflation rate declined by 0.9% compared to April levels. The core rate of inflation came in at 5.3% measured from May 2022 to May 2023.

The Federal Reserve met last week, and decided to do nothing. That differed from the previous nine meetings where they raised short-term interest rates.

The demise of the American consumer once again has been exaggerated. The Commerce Department reported May retail sales rose 0.3%. This number is not adjusted for inflation, so this number reflects slower “real” sales. The gains came at restaurants, online shopping, and general retail sales.

If you have any questions or want more information about a particular stock or mutual fund, please contact me.