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Weekly Economic and Stock Market Commentary – May 22, 2023


Note: The US investment markets, and my office, will be closed Monday, May 29th in commemoration of Memorial Day. Normal operations resume Tuesday, May 30th.

As for the stock market specifically:

The markets continued to float up and even the Dow Jones Industrial Average joined in the fun. The Nasdaq Composite continues to show the way to increased levels. This is a flip-flop of what happened in 2022.

Despite the nature of the movement of the Nasdaq, and the S&P 500 to a lesser extent, the market is rising on the backs of just a few stocks which have risen tremendously so far this year.

Long-time readers know I don’t (can’t) mention individual stocks in this column. However, feel free to give me a call if you’d like to know more.

Another phenomenon going on this year is the rotating firing squad. With the exceptions of the few stocks I won’t name, we have seen sectors come into favor one week, only to be beaten back the following week.

There was some good news. Of the six major asset classes I track, US stocks moved up to 3rd place last week from 4th place. That is a welcomed piece of data.

We had a good week with the bullish percent indicators, but no indicator changed direction last week. The recommendation of WEALTH PRESERVATION continues until further notice.

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

Below is where our indicators stand as of May 19, 2023 (Courtesy Dorsey, Wright, and Associates).

On a general note:

The Department of Commerce reported April retail sales rose by 0.4% compared to March. That was the first gain in 3 months. The big gainers were automotive purchases, dining, and internet purchases. The bad news — sales did not grow as fast as inflation.

The National Association of Realtors provided the news that existing home sales during April fell 3.4% from March to a seasonally adjusted annualized rate of 4.28 million homes. The median sales price fell to $388,800, which is 1.7% below April 2022. Existing home sales fell in 14 out of the last 15 months.

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