The latest New Residential Construction report shows further weakness in the sector, with permits and groundbreaking declining sharply for multifamily projects.
Outlook
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The Fed's recent actions have led to a reevaluation of what it means to 'fight the Fed,' and it's crucial for investors to understand the difference between a trading opportunity and an investable rally.
Investing involves risk, including the possible loss of principal, and it's essential to diversify and seek personalized advice to navigate market fluctuations.
Growth substantially outperformed value as market priorities shifted from interest rate sensitivity to economic growth sensitivity, leading to a high level of performance dispersion within equity markets.
The US Treasury market experienced some unusual trading activity, with the UST 2-Year yield surging by 70 bps in February and then tacking on another post-Powell increase of 25 bps, reaching a peak of 5.07%, the first time eclipsing the '5%' threshold since 2007.
As the world shifts towards a more sustainable future, corporations are playing a crucial role in driving the clean energy transition. With over 40% of the world's largest companies setting net-zero targets, the demand for clean energy technologies is skyrocketing.
The traditional value-oriented sector has seen a shakeup, with 14 S&P 500 stocks reclassified at the sector level, as FinTech's disruption on the Financials sector could result in a higher growth exposure than originally intended.
Microsoft's investment in OpenAI and its plan to incorporate GPT-4 into Office 365 has the potential to add tens of billions of dollars in incremental annual revenue.
Tune out the noise and focus on what you can control, like your time horizon, risk tolerance, and goals. Because I can promise you one thing: there will be several more headlines in 2023 that will cause stock prices to react.
The inflationary impact of higher energy costs can also tip the economy closer to a recession as consumers may cut back on spending when facing pain at the gasoline pump, making the Fed's efforts of tightening monetary policy to fight price increases more difficult.
Quality stocks have historically exhibited higher long-term returns and lower volatility, creating an attractive risk-return profile for core holdings in investors' portfolios.
