Our investing outlook started with a theme of returning to normalcy and finding balance. And while that theme will carry us through year-end, the year has come with some challenges. We saw it in the banking sector with three large bank failures in the spring, followed by up-to-the-deadline debate about the debt ceiling. Yet, despite the market gyrations these events caused, the overall financial system seems stable. Some bright spots include:
- Inflation is under 5% at home, significantly lower than its 8.3% level this time last year
- The fed funds rate has potentially reached its apex with the Federal Reserve’s (Fed) quarter percent rate increase in May
- Global inflation has ticked down from its 8.7% high in 2022, and is following a slow descent to a projected 6.5% for 2023
These bright spots help shape our view on the next six months, which may come with some potential opportunities in international equities, core bonds, and industrials. Balancing things out, there are unknowns still out there—like recession and interest-rate volatility. The Fed has already indicated they may raise rates further if inflation continues to remain stubbornly high. On the other hand, rates could see a fairly sizable drop in the event of recession. What’s key here is how rate volatility resolves itself, as that will be a big driver for markets.
And while we don’t know the answer to that yet, we know that the insights found in the report will help position investors, along with guidance from their financial professional, to achieve their goals. And of course, our seasoned team of experts will be by your side, providing guidance and actionable insights as the second half unfolds.
The insights in LPL Research’s Midyear Outlook 2023: The Path Toward Stability will help position investors, along with guidance from their financial professional, to achieve their goals by providing guidance and actionable insights as the second half of 2023 unfolds.
Click here to access the full Midyear Outlook 2023: https://lpl.com/news-media/research-insights/lpl-research-midyear-outlook-2023-the-path-toward-stability.html