Written by: Dan Moylan, Chief Investment Officer, on June 5, 2023

Hello all,

We had a mixed May in the stock market this year.  The Nasdaq was up substantially on the month at +5.92%, the DOW was -3.36%, and the S&P was basically flat at +0.29%.  We are overweight TECH in our ROOF investments, so we saw many of your accounts outperform the Nasdaq.  The average rate of return (ROR) for the month was just over +8%.  Please look at your accounts to determine your own ROR, if you are invested more conservatively in Value/dividend stocks, cash, treasuries, or bonds you would not have realized this ROR.  The market continues to perform positively this year, much nicer than 2022.  

Look for continued volatility. We still have inflation in some sectors which keeps interest rates hiked to slow growth for the FED.  The unexpectedly strong Jobs Report last week showed the U.S. adding +339,000 non-farm payroll jobs compared to the guess from analysts of +190.000. This was a huge miss by the analysts.  The Jobs Report supports continued strong consumer spending. Washington coming to an agreement to avert the shutdown of spending has removed a significant headwind from the market.  The market was priced with the expectation that a deal would be reached.  President Biden and Speaker McCarthy worked together to avoid the dreaded “default” which would have set us up for a bad ending to Q2.  Too bad our government can’t work together on some of our other issues.  With all this happening we are still bullish in stocks for the upcoming month and expect to hold gains through the year.  

In May, one change that was made had us selling VTV, the Vanguard Value ETF, in all accounts that owned it and buying back VGT, VDC and VOO (TECH, Consumer Staples, S&P) indexes with the proceeds.  These three were included in our LGCAP model previously, but we raised the percentages held to absorb VTV.  We also moved Pfizer (PFE) back to a buy.  We sold all the PFE holdings in January of this year, with many of you realizing a nice gain on this trade because it had become overvalued.  We feel it has become undervalued now, so we have bought it back. We are buying Intuit (INTU) and Deere (DE) in TECH, ROOF, and HIGH VALUE models as well.  That’s it for today.  

I hope everyone has a great summer!

If you have any questions, we’re here for you! Call us at 844-CARLSON (844-227-5766) today!