The S&P 500 (SPY) just logged another strong month, gaining more than 3% in May and early June on a resolution of the debt ceiling and a better than expected jobs report.
The NASDAQ 100 (QQQ) led the way again, up 10% in the last month.
The Vanguard Global Stock Index (VT) lagged, up 1.5%.
The strong month adds to a strong year for stocks.
The S&P 500 is up 11% in 2023.
The NASDAQ 100 is up a mind blowing 34%.
The Vanguard Global Stock Market is up 10%.
Dividend stocks have been rebounding but still lagging the broader stock market.
The iShares Select Dividend ETF (DVY) is down 8%.
The iShares High Dividend ETF (HDV) is down 4%.
Why Did Stocks Rally?
Stocks gained on two key events.
U.S. debt ceiling was resolved: U.S. lawmakers were able to resolve the stand off over the debt ceiling and approve a new budget. This enables the federal government to avoid a ‘default’ and that gave investors across the world a boost of confidence.
Monthly jobs report better than expected: Stocks also got a boost when the monthly jobs report came in better than expected. Despite higher interest rates and the slower economic growth that comes along with that, U.S labor demand remains strong.
What Should We Expect Moving Forward?
In the short run stocks are looking a little over bought – particularly the tech-heavy NASDAQ. I wouldn’t be surprised to see a small pullback of 2%-3% in the next few weeks.
Beyond that I am optimistic on stocks. Stocks have stabilized this year, the rebound is in play and I expect more gains in the back half of the year.
But don’t take it from me – I am seeing a lot of credible studies that suggest stocks are poised for more gains. Here is one of my favorites from twitter.
The bottom Line: After a tough year in 2022, stocks are on the rebound in 2023. Looking forward I am expecting more gains. I view any weakness in stocks as an opportunity to buy low and add cash to the market.
I’ll be back with another update next week – have a great day!
Disclaimer: This is not investment advice. This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading.
