January 2023 Pricing Commentary

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The month of January produced remarkable investment performance, carrying forward a significant recovery from the lows of 2022. In retrospect, common stocks ended December unduly depressed and this past month’s extraordinary recovery was a powerful snapback, with the technology sector providing robust investment torque.

The investment shift to a more positive sentiment during January was largely the result of unexpectedly good corporate earnings results, steady economic growth, decelerating inflation, and lower market interest rates.

Interestingly, it appears investors have begun a meaningful migration out of commodities and defensive stocks and back into information technology, growth, and high beta securities. We expect this rotation to continue, which should provide a positive tailwind for our ABC portfolios.

Reviewing our January performance, all three ABC Funds outperformed during the month. Our main portfolio outperformers included Adobe, Alphabet, Amazon, Apple, Autodesk, Meta, NVIDIA, S&P Global, Visa, and Zoetis.

In fact, following yesterday’s market close, Meta announced exceptionally strong financial results and positive forward guidance. Consequently, Meta closed up 23% in today’s trading session.

Additionally, we believe there remains a substantial pool of uncommitted cash on the sidelines, which we expect to be deployed into equities within the year. In summation, we remain very optimistic about the economic and investment prospects for 2023.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

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