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There is a saying that smooth seas do not make skillful sailors...when it comes to investing, at no time has this been more true than during the first half of this year. Investors faced major events including the war in Iran, oil prices pushing inflation to multi-year highs, high equity valuations, and many questions around artificial intelligence (AI). And yet, markets continued to climb to new all-time highs and corporate earnings grew at a double-digit pace.
How is the economy doing today? Inflation is high but could improve if oil prices remain low. The job market has begun to heat up again, reversing last year’s concerns over the slow pace of hiring. The dollar has stabilized and rebounded more recently, trade is still uncertain but has stabilized, and business investment has accelerated. While many consumers are feeling pessimistic, they continue to spend on both necessities and discretionary items.
Consider World Cup ticket prices: even in Kansas City, entry-level seats (think nose bleeds) ranged from over $400 apiece for group-stage matches to more than $1,500 for quarterfinals. Despite higher costs, consumers continue to spend on experiences they value, highlighting resilient demand. While economic signals remain mixed, the broader economy appears healthy-a backdrop that has historically been supportive of long-term market performance.
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