Taking stock
We thought we’d first reflect on the stock market which — despite having to reckon with banking blow-ups, geopolitical tensions, and interest rate hikes over the last 3 months — has had a pretty solid start to the year.
The S&P 500 Index is currently up ~4% in 2023 as investors continue to muddle through the uncertainty of rising interest rates and their impact on the economy. Energy stocks have failed to replicate their 2022 performance and pharmaceutical stocks are no longer boosted by Covid vaccine rollouts. Shares in Moderna, for example, are down 16%, while Pfizer has dropped 21%. Casino operators and the entire travel industry are currently on the other end of the spectrum in the post-Covid world, with Wynn Resorts, United Airlines and Royal Caribbean all up 29%, 23% and 10%, respectively.
Tech stocks strike back
The biggest comeback story, however, has been tech.
Tech stocks account for 4 of the 5 best-performing stocks in the S&P 500 this year, a strong turnaround for the sector after a particularly brutal 2022. Perhaps investors felt last year’s hammering was overdone, or maybe they’re responding to the sector’s new penchant for ruthless efficiency and focus, with many companies cutting back and reversing their recent rampant hiring sprees. For example, Meta is the second-best-performing company in the S&P 500, after really pushing 2023 as its “Year of Efficiency”. An approach that — so far — seems to be working.
