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Market Recap
WEEK OF JUN. 26 THROUGH JUN. 30, 2023
The S&P 500 index rose 2.3% last week, boosting the market benchmark's June increase to 6.5% as investors were encouraged by data showing stronger-than-expected US economic growth and lower-than-expected weekly jobless claims. The S&P 500 ended Friday's session at 4,450.38, up from last Friday's closing level of 4,348.33. It reached a fresh 52-week intraday high on Friday at 4,458.48.
Friday marked not only the end of the week and month but also the end of Q2 and the first half of 2023. The S&P 500 is now up 16% for the first six months of the year after rising 8.3% in the second quarter.
The gains came as economic data came in better than expected while the country's largest banks passed the Federal Reserve's annual stress tests.
Among the stronger-than-expected data, the third estimate of Q1 gross domestic product showed real gross domestic product in the quarter rose at an annual rate of 2%, up from the prior growth estimate of 1.3% and above the Econoday consensus estimate for a 1.4% gain. Also, claims for jobless benefits in the US fell to the lowest level in four weeks, defying expectations for a slight increase in the number of people seeking unemployment benefits, government data released Thursday showed.
The Federal Reserve gave investors more good news, saying 23 of the country's largest banks passed the regulator's stress tests of lender strength in the face of a hypothetical economic recession.
All of the S&P 500's sectors rose during the week.
The real estate sector had the largest percentage increase, up 5%, followed by a 4.8% gain in energy, a 4% rise in materials and a 3.9% bump in industrials. Other sectors up by more than 2% included technology, financials and consumer discretionary. Communication services eked out the smallest gain, rising 0.4%.
The gainers in real estate included Ventas (VTR), which received an investment rating upgrade last Friday to strong buy from outperform from Raymond James. Shares of the health care real estate investment trust rose 6.3% this week.
The energy sector's climb came as natural gas and crude futures also posted weekly gains. Gainers included shares of Targa Resources (TRGP), which rose 8.8%, and Halliburton (HAL), up 6.8%.
The small gain in communication services came as the sector was limited by a 2.2% drop in the shares of Alphabet (GOOGL) amid investment rating downgrades from analysts at Bernstein as well as UBS. Analysts at UBS, which downgraded the stock to neutral from buy, said the Google parent company faces limited upside growth and medium-term revenue risk.
The second half of 2023 kicks off this week with readings on June manufacturing and May construction on Monday, followed by June private-sector employment reported by ADP on Wednesday, weekly jobless claims on Thursday and the June employment report on Friday. Canadian markets will be closed today, Monday, to observe the Canada Day holiday while US markets will be closed tomorrow, Tuesday, for Independence Day.
