The Flyer
May 2023 Edition
Greetings!

We continue to see the push and pull in the market between the pessimists and the optimists. The market is described like this in a multitude of ways: one foot on the gas and one foot on the brake (T. Rowe Price); swamp-ish (JP Morgan), a Goldilocks economy (economist Jeremy Siegel). All these descriptors seemingly point to the feeling of going nowhere or even stagnation. That may be the feeling, but as financial advisors we like to look at the numbers. 

Recently NVDA became one of the first tech stocks to recover from its 2022 drawdown, with Apple and Microsoft close behind. These large tech stocks, in fact, have driven most of the gains in the S&P 500 Index (the 500 largest companies in the US) this year, with the 50 largest names in the index up more than 11.7%. The majority of stocks, however, are underperforming.
Generals vs. Soldiers
Source: Charles Schwab, Bloomberg, as of 5/26/2023

"Top 5" represent five largest stocks in the index by market capitalization in any given month. "Other 495" represent the rest of the index not included in the top five. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance is no guarantee of future results.

In fact, the percent of stocks in the S&P500 beating the index is at its lowest level since 2000.

The lack of participation by the rest of the large cap market can be seen as a sign of economic deterioration. This is not a surprise as the economy continues to recover from COVID and adjust to big changes during a short period of time (labor market, inflation). We continue to look long-term while being aware of the short-term

Your advisors,

David, Amanda, Danielle and Emily at Team Propel
The S&P 500 lately is like a duck. Be a little wary of what you
can't see churning beneath the surface.
Thrills, Chills, and Money Market Bills.

Money market funds have seen an enormous inflow of cash over the past several months.

In their latest podcast episode, Emily and Amanda were joined by fellow advisor David Vaught, CFA, to discuss the pros and & cons of using money market funds in our current market environment.

Money market funds currently return north of 4%. This is a great rate compared to what you could get only one month ago. As a result, money markets are being flooded with funds.

We urge our clients to take a long-term view. Just as money markets have a great rate today, the rate tomorrow is uncertain. Now is a great time to lock in a longer-term rate, either with bonds or stocks depending on your risk tolerance, and if you have a longer time horizon for your funds.
As Seen on Twitter
When CNBC airs their special report, "Markets in Turmoil" expect an upside.

We try to emphasize this point with clients - decisions made based on fear get you nowhere and often set you back. This point is perfectly evidenced by the below chart shared by Charlie Bilello on Twitter. The CNBC special report on "market in turmoil" remains a perfect indicator for a positive return on the S&P 500 Index one year later.
All content herein is for educational and entertainment purposes only. It should not be taken as investment advice, tax advice or legal advice.

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Propel Financial Advisors | www.propelfinancialadvisors.com