Sweet Summertime

You may be like many investors who have been (patiently) awaiting some signs of light at the end of the volatility tunnel delivered by the capital markets over the past year and a half. Fortunately, the second quarter of 2023 brought not just the start of sweet summertime on June 21st, but also welcome rays of sunshine for investors around the world as the capital markets continued their 2023 move in a positive direction.

Good news abounded during the second quarter, with many factors contributing to the overall positive results. The Information Technology sector dominated the equity markets in the U.S., helped in large part by exciting advances in artificial intelligence. Encouraging economic data—characterized by diminishing inflation and historically low unemployment—contributed to positive performance across sectors.

As we look ahead to the second half of the year, the Entrust Investment Committee believes the Federal Reserve will continue its battle against inflation with at least one more rate increase following the current pause. If inflation is successfully tamed to more palatable long-term levels, investors will likely be pleased with their portfolio results—even though economic headlines may be less favorable. This typically occurs because the stock market is a future-focused machine, while economic data looks backwards.

The following slide illustrates that there typically tends to be cause for optimism as the end of a rising interest rate environment draws near:

Our Entrust team welcomes your thoughts as you digest this perspective and hopes that your sweet summertime includes some of the old picnic favorites like hand-dipped ice cream and ice-cold watermelon. Please feel free to contact us at any time.