In this episode of KanyeCast, Steve Rigali, Executive Managing Director with Kanye Anderson Rudnick, speaks with Richard Sherry, Portfolio Manager for the KAR Global Dividend Yield strategy. Sherry offers his insights on Global Dividend Yield equities during the quarter and his outlook for the stock market for the remainder of 2023.
Equities Dominated by Mega Cap Stocks
Technology-based mega-cap stocks drove stock market performance in Q2 2023. Sherry notes that while technology stocks are not typically high-yielding, those with AI exposure had a solid second quarter.
Outside the technology sector, industrial stocks did well and financial stocks remained stable in the aftermath of the March banking crisis. Energy stocks underperformed due to a lower-than-expected rebound in Chinese demand.
Considerations for the Rest of 2023: Banking, Interest Rates, and a Potential Recession
Sherry rounds out his discussion with an examination of key considerations for the Global Dividend Yield strategy in the second half of 2023. Sherry believes it will be important to monitor earnings issues in US banks to ensure that capital issues do not arise for bank and insurance stocks that the strategy currently owns. The possibility of a recession also lingers, although slowing inflation indicates a soft rather than hard landing. To capitalize on this, Sherry believes it will be important to maintain exposure to businesses that benefit from a pick-up in economic activity.
Concerning high interest rates, which can be negative for higher-yielding stocks, Sherry notes the Fed’s plan to return inflation to 2% appears to be working, which should result in lower interest rates and a more stable economic environment.
For more insights, read our Q2 2023 Commentary, subscribe to Kaynecast where we provide the latest updates on our investment strategies, or listen to the podcast for Sherry’s complete stock market commentary.
This information is being provided by Kayne Anderson Rudnick Investment Management, LLC (“KAR”) for illustrative purposes only. Information contained in this material is not intended by KAR to be interpreted as investment advice, a recommendation or solicitation to purchase securities, or a recommendation of a particular course of action and has not been updated since the date of the material, and KAR does not undertake to update the information presented should it change. This information is based on KAR’s opinions at the time of the recording of this material and are subject to change based on market activity. There is no guarantee that any forecasts made will come to pass. KAR makes no warranty as to the accuracy or reliability of the information contained herein. Past performance is no guarantee of future results.