The Financial Quarterly

2nd Quarter 2023

Robert Schaff, MBA, CFP®, CIMA®
Uptown Partners

After a strong start to the year, stocks shrugged off bank woes, debt ceiling gridlock, and recession jitters to turn out a powerful Q2 performance.1

Is the bear market finally over? Will we see more volatility ahead?

Let's take a look at what happened in Q2 and what might be in store for Q3.

Looking Back

How Did Markets Perform Last Quarter?

S&P 500


The broader U.S. market ended the first half with a bang, completing its third straight quarter of gains.1



The tech-focused NASDAQ surged in Q2, delivering its best first half since 1983.1

DOW 30


The blue-chip Dow lagged its counterparts, but still delivered respectable gains in Q2.1

Looking Ahead

What Factors May Influence Markets in the Months to Come?

Let’s take a look ahead at some of the factors that we’ll be watching in the weeks and months ahead.

Interest Rates

The Federal Reserve has indicated that it plans to raise rates again in 2023.2 The pace and magnitude of those hikes are likely to impact market sentiment.

Economic Data

Markets tend to reflect perceptions of the economy, so investors will be closely watching the data on inflation, jobs, spending, housing, and other sectors.

Recession Indicators

Recession fears are still present and any data suggesting economic growth is turning negative will likely weigh on markets.

U.S. Politics

Apprehension around new regulations and the upcoming election season may influence markets.

War in Ukraine

The Russian invasion of Ukraine and Russian leadership struggles may inject more global uncertainty.

Technology Stocks

Exuberance around artificial intelligence could give way to pessimism, causing selling pressure on high flyers.3

"Markets have roared back since the 2022 doldrums, but expect volatility ahead."

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Bottom Line

Key Takeaways for Savvy Investors

What should we take away from the first half of 2023?

Things are looking up.

Optimism drove markets in the first half of the year and there’s reason to believe that positive trends could continue.

While a few key technology stocks contributed significantly to index growth, there are signs that the confidence is spreading to broader areas of the market.4

This is a good sign and could mean that we’re in the early stages of a bull market.

However, rallies don’t typically move in a linear fashion so it’s wise to expect pullbacks and corrections in the months ahead.

Flexibility is still key in today’s uncertain environment.

Is a recession coming in 2023?

That’s a tough question because the answer is still being hotly debated.

Some economists believe the risk of a recession is decreasing and see only a 25% chance of recession in the next 12 months.5

Others see the pressure of high interest rates resulting in a “moderate” recession this year or next.6

Which prediction will be correct?

We’ll have to wait and see.

Bottom line: we’re watching the data, staying flexible, and looking for opportunities.

Questions about markets or your portfolio? Please reach out. I'd be happy to chat.

Robert Schaff, MBA, CFP®, CIMA®
Uptown Partners