July 2023 Monthly Recap
Market Snapshot
*As of 07/31/2023
By the Numbers
  • The S&P 500 index has gained over 20% year-to-date, factoring in dividends. It now stands only 4.5% below its peak level recorded in early 2022.
  • The technology-heavy Nasdaq Composite has performed well, delivering a return of 37% during the same period.
  • In contrast, the Dow Jones Industrial Average, which represents a broader range of industries, has posted a more modest return of 8% over the course of the year.
  • The current consensus earnings-per-share estimate for 2023 hovers just under $214, showing a marginal decline compared to the previous year’s figure of $215. This indicates a potential flat earnings growth for the year, a departure from the 7.8% average earnings growth rates seen over the past four decades.

Recent economic data reveals promising trends, with improving inflation and steady GDP growth providing a strong foundation for the ongoing market rally. Major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have shown impressive performance. The S&P 500 has surged more than 20% year-to-date, nearing its previous peak from early 2022. The technology-focused Nasdaq Composite has outperformed, boasting a remarkable 37% return. In comparison, the Dow Jones Industrial Average, representing a wider range of industries, achieved a more modest 8% return.

However, despite the overall positive economic growth, corporate earnings have not yet reflected the improvements. The second-quarter earnings for the S&P 500 are projected to decline, marking the third consecutive quarter of falling profits. Analysts, however, foresee a potential earnings recovery beginning in the fourth quarter of this year, with a healthy 8% growth anticipated for the next twelve months. Although 2023 may see flat earnings growth, prospects for 2024 and 2025 remain optimistic, with projected earnings growth rates of 12%.

Understanding the importance of earnings growth as a fundamental driver of stock returns, long-term investors should focus on corporate profitability. Steady earnings growth is a key factor that propels stock prices higher over time. Despite temporary fluctuations in earnings, most sectors are expected to experience growth in the coming year.

While we cannot predict the markets, we are optimistic as we continue to monitor the current rally and the improvements in inflation. We are staying steadfast in our focus on your long-term planning goals, utilizing tax efficiency and diversity of asset classes. As always, we remain fully committed to you and your financial well-being.

Steady Economic Growth Fueled by Consumer and Business Spending.

Sources: Clearnomics, U.S. BEA
© 2023 Clearnomics, Inc

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website. Past performance is not a guarantee of future results.

The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The market index is unmanaged.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.