Bullish Market Defies Expectations

Bullish Market Defies Expectations

Mid Cap Growth Review of the Second Quarter of 2023 | KayneCast 226

August 1, 2023

In this episode of KayneCast, Steve Rigali, Executive Managing Director with Kanye Anderson Rudnick, speaks with Chris Armbruster, Portfolio Manager for the KAR Mid Cap Sustainable Growth portfolio. Armbruster provides a stock market review for Q2 2023 and offers insight into what the rest of the year holds for the market.

Stock Market Turns Bullish Despite Disruptive Factors

Armbruster notes multiple events continue to threaten the global economy, including the Russia/Ukraine war, ongoing tension between the United States and China, and massive layoffs in the tech sector. In March, the markets endured the second and third largest bank collapses in U.S. history, the Feds continue their hawkish and unprecedented monetary policy to raise interest rates to combat inflation while shrinking its balance sheet, and the yield curve remains inverted.

Despite these concerns, the market remained bullish during Q2 2023. Armbruster notes the S&P 500 posted an 8.7% return in the second quarter, bringing the YTD gains to 19.6%. Economic data validated the market move, with Q1 GDP revised upwards to +2% and an increase in household spending to 4.2%.

Watching the Market’s Next Move

Armbruster cautions it may still be too early to issue an “all clear,” but “the current market environment feels much healthier. Companies are being rewarded for streamlining costs, accelerating growth, and embracing disruptive technology like Artificial Intelligence to help them achieve both of those objectives.”

The number of S&P stocks above the 200-day moving average was 65% at the end of Q2, with many of the gains coming from the “Big Seven” (Apple, Amazon, Alphabet, Microsoft, Meta, NVIDIA, and Tesla). As the year progresses, Armbruster would “like to see the momentum broaden out with more tangible recoveries taking hold in a more diverse set of industries and across the broader spectrum of market capitalization.”

Listen to the podcast for Foreman’s complete stock market performance review, and read our Q2 2023 market review commentary for more information.

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.

Related Insights