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How Are We Doing? A Monthly Outlook

How Are We Doing? A Monthly Outlook

August 10, 2023

Despite persistent and lingering heat and humidity in most parts of the country, the bulls kept running in July, with both the economy and stocks proving quite resilient despite rising interest rates. In their ongoing efforts to lower inflation and hit the government’s 2.0% inflation target, the Federal Reserve (Fed) raised interest rates by another .25% in July. After putting rate hikes on pause in June, the July increase is now the 11th hike, bringing it to a lofty 5.25%-5.5% -- the highest in 22 years. 

With mid-year earnings season results looking surprisingly good, there is hope that the Fed has effectively suppressed inflation without causing a recession. However, if this optimism survives the summer heat (and possibly an additional rate hike), time will tell. The Consumer Price Index gained just 3% year-over-year in June, down from peak 2022 inflation levels of 9.1% and not far from the Fed’s 2% long-term target. 

The likelihood of the economy’s “soft landing” (avoiding a recession despite the ongoing rate hikes) is still not a given, and many economists continue to see a high probability of a U.S. recession sometime in the coming year. However, the resilience of the labor market – with more than 200,000 jobs added – is a convincing indicator that a soft landing may indeed be possible. Wages continued to rise in July, increasing nearly 4.5% over the past 12 months, and though unemployment claims were up from a year ago, they remain well under the bloated figures seen at the height of the Pandemic. 

Weather-wise, July was a brutal month for Earth’s inhabitants as we endured a record number of record-breaking climate events. News of the hottest June was quickly eclipsed by the declaration of Earth’s hottest day in July (a record that went on to be broken 16 more times before the end of the month). July now holds the infamous title of the hottest month on record. Ocean temperatures aren’t faring any better, with Florida seeing hot-tub-level temperatures on the water’s surface, resulting in the death of massive amounts of coral in the Keys. What’s particularly thought-provoking (and a bit terrifying) is that scientists speculate that this summer might one day be remembered as one of the cooler ones in the future. 

Looking ahead in August, National Senior Citizens Day is August 21st – it’s a great time to recognize the contributions older generations have made (and continue to make) in society. Take some time to show your appreciation and gratitude to the senior citizens in your life:

  • call or visit a loved one
  • plan an activity at a favorite place
  • volunteer at a retirement home
  • help with chores or errands.


As summer winds down, it’s a great time to prepare for the changes in the months ahead. If you have concerns or questions about your finances, just give us a call. 


The market started to broaden in July. The Dow Jones Industrial Average posted 13 consecutive days of positive returns, which was its longest streak since 1987. The Federal Reserve hiked rates by 0.25% in what many traders are pricing as the last rate hike in this cycle. The anticipation of rates peaking allows for smaller cap stocks to emerge and make their first substantive returns of the year. Earnings season is in full swing, with over 50% of S&P 500 companies reporting earnings so far. Average earnings of the S&P 500 decreased by 2.80% in the second quarter of 2023, although the average “earnings surprise” (when a company reports figures that are drastically different from Wall Street estimates) increased by 6.86%. This strong earnings season, as well as renewed hope for a “soft landing,” have been the main two drivers of equities this past month.

Sector Performance

In contrast to previous months, Technology companies -- and particularly the Magnificent 7 (Apple, Microsoft, Nvidia, Tesla, Amazon, Google, Meta) -- were no longer the star children of the market. The sectors that posted the best July returns were Energy, Communication Services, and Financials. Financials were driven by strong earnings, which showed the resiliency in the banking sector, particularly in the regional banking subsector. Energy was up as oil prices rose, and macroeconomic factors (such as the war in Ukraine and China’s anticipated reopening) are set to squeeze the supply while broadening the demand for oil. West Texas Intermediary (WTI) closed the month at $81.88.


The Federal Reserve (Fed) raised rates by 0.25% to move the Federal Funds Target Rate to 5.25-5.50%. The Fed does not meet in August, so their next meeting will be in September. The overall outlook on whether further hikes will be necessary is going to depend on the data, and the Fed has two more months of data coming out before they meet again. At the end of the month, bond yields were trading slightly higher with the 2- and 10-year trading at 4.88% and 3.95% respectively.

Economic Update

The phrase of the month in July was “soft landing” (as mentioned previously, that refers to a path where inflation falls without producing a deep recession). At the start of the year, a soft landing seemed like a pipe dream, however as June economic data was released, it showed another month of strong labor data with low unemployment, inflation falling (both headline and core), another quarter of positive earnings surprises, and a GDP surprise to the upside. Fed Chair Jerome Powell did note in his speech on June 26th that the lagged effect of previous rate hikes was likely not yet felt. However, for now, the economy appears to be on the path to a miraculous soft landing.

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Dry Cleaning Workers Save
Annual Turtle Migration

A dry-cleaning business in Middletown, CT, is saving the day when it comes to a local turtle migration. The store, located off a busy two-lane highway, stands between Pameacha Pond and a grassy marsh. Each spring, female turtles make their way across the highway to the marsh behind the store to lay their eggs. The migration reverses later in the summer when the turtle hatchlings travel back to the pond.

Best Cleaner’s staff have taken it upon themselves to ensure the turtles and hatchlings make a safe journey. They keep an eye out for them in the parking lot and help carry them across the road to drop them off as close to the water as possible. The tiny hatchlings can even be found crawling along the floor of the store, causing workers to have to watch where they step.

Caring for them has become part of the job, and customers love spying the errant hatchlings when they come in to pick up their dry cleaning. Click here to read more on these heroes along with other stories on how caring humans are making animals’ lives a little easier.


Index Definitions

Dow Jones Industrial Average: The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

Dow Jones U.S. Real Estate Total Return Index: The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.

NASDAQ Composite: The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector. 

S&P 500 Bond Index: The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.

S&P 500 Consumer Discretionary: The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.

S&P 500 Consumer Staples: The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.

S&P 500 Energy: The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.

S&P 500 Financials: The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.

S&P 500 Index: The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.

S&P 500 Utilities: The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.

S&P U.S. Aggregate Bond Index: The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.

S&P U.S. Treasury Bond Index: The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.


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A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results. 

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect again loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.

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