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2Q 2023 Market and Economic Overview

These have been good times for those who participated in 2023’s equity market rally. Such rallies can become self-sustaining, partcularly if investors fear that they may be missing out. A more sober assessment would suggest that not only have market returns been highly distorted by the distinct outperformance of a few significantly-weighted names, but also that the macro environment remains highly uncertain. Beware of complacency. A recession may still happen, partcularly since Central Banks continue to struggle to repress inflationary pressures and stand commited in their fight to quash inflation fully. Further lightening until something breaks may well be the order of the day. Nonetheless, for as long as the economy is showing resilience and corporate earnings are holding at least stable, equites can remain in vogue, valuation
considerations notwithstanding.

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