Market Update Q2 2023: Are We in a Bull Market?

In this Resolute Wealth Advisor Market Update, you can learn more about current market dynamics.
Picture of Ryan Geary

Ryan Geary

As we close out the second quarter, we wanted to provide you with an overview of the various market dynamics that have played out so far in 2023. 

Are We in a Bull Market?

Let’s start with a question that’s on a lot of investors’ minds: is the bear market behind us? While the beginning of this year has fared much better than last year, in terms of the broad market performance, it’s important to take a look at what the numbers are telling us: 

  • The S&P 500 YTD performance through market close on June 15 was up 15.27%, though the index has masked a lot of turbulence underneath.
  • We have not had a broad market rally, with the Russell 2000 index, which measures U.S. small cap performance, lagging the S&P 500 significantly this year. It is only up 6.49% as of market close on June 15.
  • More than half of the companies in the S&P 500 have shown negative returns this year, as of May 31.
  • 76% of S&P 500 companies are underperforming the index.
  • 8 of 11 sectors in the S&P 500 have negative returns YTD.

While the S&P 500 looks strong on its face, there are some troubling numbers underneath. Still, the index has been strong thus far in 2023, and it is only -9.534% off its all-time high. In reviewing the factors that are driving this positive performance, it is important to note: 

  • The S&P rally has mainly happened through improving earnings per share, with estimates only dropping by 5.50% in October of 2022 (through all the Fed’s interest rate increases).
  • This represents the smallest drop in expectations for any market bottom in 40 years.

As we maintain a cautious approach to our clients’ investment portfolios, we foresee the need for a bigger reset on expectations for a lasting stock market rally. Without a bigger reset, long-term equity returns expectations are projected to be in the 4.0%-6.0% rather than in the 8.0%-12.0% range.

The Magnificent 7

As mentioned above, there has not been a broad market rally. Instead, it’s these seven companies leading the S&P 500’s overall return:

  • Alphabet (Google)
  • Apple
  • Amazon
  • Meta Platforms
  • Microsoft
  • Tesla

These seven companies are some of the largest in the S&P, and they account for 27.5% of the overall index, with a combined value of $10.7 trillion. Apple, which accounts for a whopping 7.4% of the entire S&P 500, has a market value equal to the bottom 200 companies in the index combined.

Here’s another way to look at the impact of The Magnificent 7: The equally weighted S&P 500 return would be 2.54% (as of June 12). By contrast, the equally weighted return of the Magnificent 7 would be 77.84% (as of June 12).

Interest Rate Update

On June 14, the Federal Reserve opted to pause interest rates, after a previous 10 consecutive rate hikes. However, they also hinted at further interest rate hikes to come in 2023, which is likely to hurt growth and earnings. Some analysts have been projecting interest rate cuts for the back half of 2023, but we consider this very unlikely.

We will continue to provide market updates as the year unfolds and as we make changes to portfolio allocations based on any changes in the data that we are actively monitoring. If you’d like to speak with a member of the Resolute team about your portfolio, please contact our office to schedule a Review Meeting to discuss your investment and financial planning goals. .

We thank you for your continued business and the opportunity to serve as your trusted advisor.  We hope that you enjoy your summer with your family and friends, and we look forward to our next conversation.

If you’re not yet a client and you would like to learn more about our investment management services, please schedule a call today.


The views expressed represent the opinion of Resolute Wealth Advisor, Inc. (RWA). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While RWA believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the RWA’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.

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