First Quarter 2023 Market Recap

May 2, 2023

The first four months of 2023 have been marked by mixed economic and financial market trends in both the United States and the world. While certain sectors have shown strength and growth, there are ongoing concerns surrounding inflation, supply chain disruptions, and geopolitical risks.

The US stock market has shown mixed performance in the first four months of 2023, with the S&P 500 index rising by about 8%. The technology sector continues to face headwinds, as investors remain concerned about rising interest rates and the potential for increased regulation.

The labor market has remained robust, with the unemployment rate holding steady at 3.5% in April. However, the labor force participation rate remains below pre-pandemic levels, indicating that some workers have not yet returned to the workforce. Job creation has also slowed, with nonfarm payrolls adding an average of 180,000 jobs per month in the first four months of the year. Wage growth has continued to lag behind job growth, which could lead to potential concerns regarding consumer spending power. The housing market has remained strong in the US and globally.

Inflation has remained a major concern for investors in the US, with the consumer price index (CPI) rising by 4.2% year-over-year in April, the highest rate in decades. This has been driven by increases in prices for food, energy, and housing, and has led to concerns over potential long-term inflationary pressures. The Federal Reserve has indicated that it may raise interest rates to combat inflation, which could have negative effects on financial markets.

Geopolitical risks have continued to weigh on investor sentiment, particularly in emerging markets. Ongoing tensions between the US and Russia, as well as concerns over the political stability of certain countries, have contributed to market volatility.

In the global economy, there have been notable differences in stock market performance across regions. China’s economy has continued to recover from the pandemic, with GDP growth expected to exceed 6% in 2023. This has led to strong performance in Chinese stocks, particularly in the technology sector. Developed International markets have outpaced their US counterparts as the MSCI EAFE has returned 11.62% YTD.

The bond market has also seen significant movements in the first four months of 2023, with the yield on the 10-year Treasury note rising to a level of 3.52% as of mid-April. This has been driven in part by concerns over inflation and the potential for the Federal Reserve to raise interest rates. The yield curve has continued to steepen, with longer-term yields rising faster than shorter-term yields, indicating that investors expect higher inflation in the future.


[1] The information found in this document was derived from Mercer, The Wall Street Journal and InvestorForce. While we believe these data sources and information to be reliable, its accuracy and completeness are not guaranteed. The views contained in this presentation represent the opinions of GYL Financial Synergies, LLC as of the date hereof unless otherwise indicated. This and/or the accompanying information was prepared by or obtained from sources GYL Financial Synergies, LLC believes to be reliable but does not guarantee its accuracy. The report herein is not a complete analysis of every material fact in respect to any security, mutual fund, company, industry, or market sector. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance does not guarantee future results.