PUT IN WORK (7/17/2023)

Last week, the stock market showed some incredible heart with an astounding performance, continuing its current run by pushing to new heights we haven't seen since September of 2021. The Nasdaq (QQQ) ended up 3.5%, while the S&P 500 (SPY) rose 2.4%. This week's good news is apparent but quick!

As we mentioned in last week's article, Wednesday marked the day we got the June CPI report. We emphasized the then-upcoming report, saying that it could either boost the market's current run or stop it in its tracks. It seems the market got that boost we anticipated. Admittedly, the Nasdaq's incredible growth since the start of the year can almost entirely be attributed to the seven mega tech stocks that sit at the top. However, the 43% gains we've seen it produce are still impressive nonetheless, but it also poses a question: will it continue? Truthfully, we don't know, but several large stocks could determine the result.

Some of these huge stocks are currently overbought for various reasons, be it current hype for AI or just widespread positive investor sentiment produced by comparing the past to the present. Could stocks be carried to new highs by the end of the year? Of course! Investing is a tricky business, and no one truly knows just what outcome waits around every corner, but the odds of us at least seeing some correction are pretty high, just because that's how the market has always worked. When things get too good for investors, something has to happen to bring expectations back to Earth, even if only temporarily.

Even if that does happen, stocks could and likely will continue to push higher after the correction is complete. Moreover, the rate of inflation came in at 3% last week, which is slightly less than analysts expected and down from 4% since last year. Many believe we're at the end of the rate hike cycle, with only one or two more hikes by the end of the year. Of course, we will know when the time comes, but we're hopeful for the future.

(12-month percentage change of the Consumer Price Index, June 2023. Information provided by U.S. Bureau of Labor Statistics, chart provided by bls.gov.)

PORTFOLIO UPDATE

Our portfolio has been moving nicely along with the market. Enovix (ENVX) continues to display some serious upward movement, and we're interested in seeing how long it will last before witnessing some correction. Either way, we're happy with the state of our portfolio at the moment and are looking to hold every currently owned stock into the foreseeable future. As always, thank you for reading, and happy investing.