July 2023 Pricing Commentary (Audio version now available – use the controls above.) The strength of the equity market in the first half of 2023 continued into the month of July. Interestingly, this advance confounded many of the investment pessimists who have prognosticated an impending economic recession, given that both the Bank of Canada and the U.S. Federal Reserve increased interest rates during the month. Also notable during this period was Fed Chairman Powell’s statement that the Federal Reserve upgraded its 2023 economic forecast and does not anticipate a recession for the balance of the year. Clearly, both the U.S. and Canadian economies have demonstrated remarkable resilience in the face of rising interest rates, significant recession concerns, and stubbornly high, albeit, declining inflation. However, a major positive factor that the pessimists are overlooking is corporate earnings results. For instance, over 70% of Q2 company results have beaten analysts’ expectations, including results from major corporations such as Caterpillar, Intel, Meta, Comcast, Alphabet, and General Electric. These results are impressive, and obviously, investors have taken note, pushing up year-to-date returns of the NASDAQ and S&P 500 over 31% and 19.5% respectively. Our three ABC Funds provided notably positive returns for the month, and more impressively, excellent year-to-date outperformance. Individual ABC top performers this past month included: Adobe, Meta, Alphabet, NVIDIA, Activision Blizzard, Zoetis, Danaher, Becton Dickinson, Thermo Fisher Scientific, ServiceNow, and Autodesk. Now entering the last five months of 2023, we remain optimistic with our diversified portfolios and anticipate positive results to year-end. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
