[00:00:00]Jason Fuchs: Ladies and gentlemen, welcome to the monthly Market update here on Dad Sense, where we talk about the stock market, the economy during the month of June. And hey, we are one week behind schedule, so we apologize and we're gonna jump right into it.
[00:00:16]Jason Fuchs: I'm gonna start with a general overview of what's happening in the economy, and then we'll look at some of the data more specifically. Sound good? All right, let's get into it now.
[00:00:27]Jason Fuchs: For the optimist among us, we were relieved to see some good financial news in June.
[00:00:33]Jason Fuchs: US stocks were up for the month, the quarter. Unfortunately, bonds didn't fare as well. The good old s and p 500 defied recession fears and a US banking crisis. It staged an improbable 16% advance for the first half of the year, giving previously bearish analysts a hard time [00:01:00] predicting where equities will go next. We haven't seen anything like this before, ladies and gentlemen. So pulling data from previous experiences to try and gauge what we think will happen in the future.
[00:01:14]Jason Fuchs: Well, it's been a little challenging to say the least. The NASDAQ powered ahead nearly 32% for its biggest first half increase in four decades. It's incredible
[00:01:28]Jason Fuchs: market performance? Well, it reflected positive economic news. We have continued strong job creation, strong income, and spending growth and improving consumer confidence. Inflation, well, not too high still it coming down. In fact, it reached its lowest level in quite a while last month.
[00:01:50]Jason Fuchs: There's no real evidence that the Fed's interest rate policy is working, which could mean. Rates will stabilize at or close to current levels. We're seeing [00:02:00] now
[00:02:00]Jason Fuchs: supporting the good news in the markets. Sales of new single family homes rose for this third straight month after increasing 12.2% in May.
[00:02:11]Jason Fuchs: The median sales price of a home or new home sold is about 416,300.
[00:02:18]Jason Fuchs: The advanced report on the international Trade goods balance for May, well, it showed a 6.1% decline in the trade deficit from the prior month exports fell 0.6 while imports decreased 2.7%, and the national average retail price for gasoline was $3 and 57 cents per gallon. You believe that just down slightly from the prior month, but $1 and 30 cents less than a year ago.
[00:02:50]Jason Fuchs: Wow.
[00:02:51]Jason Fuchs: For the ending June 24th, there were 239,000 new claims for unemployment, and that's a decrease of 26,000 [00:03:00] from the previous week's level. For all of you investors out there betting the upward trend will continue over the next few weeks. Well, you've got recent history on your side. The s and p 500 has posted a positive return in eight consecutive Julys
[00:03:16]Jason Fuchs: and the tech heavy. NASDAQ 100 has climbed in July for 15 straight years. Of course, ladies and gentlemen, there are still lingering risks. Inflation could again, spike higher. It could drive interest rates upward. It could force additional increases by the Fed.
[00:03:36]Jason Fuchs: Beyond our own borders. Let's not forget there is still a war in Europe. We still have uncertainties about China and some doubt. The rally staying power
[00:03:48]Jason Fuchs: analysts at UBS Global Wealth Management, they commented recently that the likelihood of a recession hinges mostly on monetary policy [00:04:00] becoming more restrictive. And they quote, with stocks already priced for the near perfection of a soft landing.
[00:04:07]Jason Fuchs: We see better risk reward in high quality bonds over equities. End quote.
[00:04:11]Jason Fuchs: That was a very general overview of what's going on in the stock market and the economy. We're gonna get a little bit more specific now, and we're gonna start with stocks.
[00:04:21]Jason Fuchs: Large, primarily tech stocks were the name of the game in June, the s and p 500. The NASDAQ both posted impressive returns of 6.61% and 6.55% respectively. Most of the return on those indices is attributed to just a few prominent names. Names you might know like Apple. Google, Nvidia, Tesla to name a few.
[00:04:48]Jason Fuchs: The gains were fueled by the Fed, pausing their rate hiking sequence, which signaled to traders that inflation is starting to come under control and that fewer rate hikes would [00:05:00] be needed moving forward. The number of stocks that led the rally was small
[00:05:06]Jason Fuchs: a large portion of listed stocks underperformed the index despite the large gains from the index itself.
[00:05:15]Jason Fuchs: What about sector performance? Well, ladies and gentlemen, I'm so glad you asked US. Sector performance, large cap stocks, both value. Growth, they outperformed the rest of the market. Smaller stocks though posted much less appetizing numbers in the month.
[00:05:34]Jason Fuchs: Tech consumer discretionary led the way with nearly double digit monthly returns in both of those sectors. You believe that typical recession resistant sectors like energy, utilities, consumer staples, those were some of the biggest losers, probably because it's becoming more evident that investors are not yet worried or they're at least [00:06:00] not pricing in recession.
[00:06:02]Jason Fuchs: Oil took a dive in June, dipping below $70 a barrel on multiple occasions, and it closed the month at $70 and 64 cents. What about bonds? Well, we all know that the Fed met on June 13th and June 14th. They decided to hold the federal funds rate at five to 5.25%. However, the committee said they're still considering future rate hikes.
[00:06:31]Jason Fuchs: And that indicates that the hiking cycle has not yet ended, and that's important. The market is currently pricing at a 0.25% increase this month, July. Also, the debt ceiling debacle was finally resolved. Anyone glad that's done? But hey, we'll probably talk about it again next year, right? And that ruled out the possibility of a US debt default.
[00:06:58]Jason Fuchs: On the back of all [00:07:00] this news, bond yields were trading slightly higher to close The month we look at the two and 10 year treasury. Two year was at 4.895%, and that 10 year was at 3.8369999999999997%.
[00:07:13]Jason Fuchs: I want to get more specific on what happened in the economy in June. So we're jumping into that now. June's economic performance. Matter of fact, mimicked maze inflation was on its way down. Stocks have been rallying, although the rally is concentrated on just a few names, and the Fed has been doing what the market expects it to do. In addition, the labor market is still strong.
[00:07:40]Jason Fuchs: Not many people are filing for unemployment, and those who do tend to find new jobs pretty quickly. If we look ahead, there's a new dirty word on the street replacing inflation. It's recession. Anyone getting tired of hearing that word? You remember inflation. [00:08:00] This word drives and investors towards larger companies with strong cash flows and the faith of the investors.
[00:08:10]Jason Fuchs: Although there's no definitive answer about whether a recession is coming, economic uncertainty is certainly on the horizon.
[00:08:19]Jason Fuchs: Ladies and gentlemen, that was the monthly market up update for the month of June. Wishing you continued good vibes as we reached the midpoint of summer. You believe that we are halfway through summer. It's crazy. We are so thankful to be part of your financial coaching team. And as always, ladies and gentlemen, if there's anything you need, please reach out to me.
[00:08:42]Jason Fuchs: I would be happy to help. Again, thank you for being here. You're here every week. We love it. We appreciate you. Be well.
[00:08:51]Jason Fuchs: Oh, oh, oh, hello. It's me, Santa Claus, otherwise known as Old Saint Sage [00:09:00] Path. Jason has me on payroll so his three-year-old daughter can get all the hot toys ahead of schedule. I'm visiting from the North Pole so I can read the disclosures. We don't want to irritate regulators now do we. Securities and investment advisory services offered through F S C Securities Corporation.
[00:09:18]Jason Fuchs: F S C member Finra, S I P C F S C is separately owned and other entities and are marketing names, products or services referenced to our independent of F S C, Jason Fuchs, Amber Fuchs, and Sage Path Financial Advisors are unaffiliated, ho, ho, ho.