February 9, 2023 | Investment Review

Investment Review - February 2023

  1. The year has started with a bang as the major averages reversed December’s downturn with robust gains. During January the Dow 30 returned almost 3%, the S&P 500 was up 6.2% and the Nasdaq Composite soared 10.7%. Foreign markets also rose strongly; Emerging Markets and Developed Markets both posted 9% returns.

  2. Technology companies, in particular, rallied back in January from a very disappointing 2022, on the heels of interest rate hikes. With most of the Fed’s tightening behind them, big technology companies regained interest from investors looking for discounted shares.

  3. With 50% of S&P 500 companies reporting actual results for the fourth quarter of 2022, 70% have reported a positive earnings surprise and 61% of companies have reported a positive revenue surprise. However, the blended earnings decline for the S&P 500 is -5.3% marking the first time the index has reported a year-over-year decline in earnings since third quarter of 2020. The forward 12-month P/E ratio for the S&P 500 is 18.4. This P/E ratio is below the five-year average of 18.5, but well above the 10-year average of 17.2. As the balance of reports come out, a better sense of direction for 2023 may be determined.

Key Investment Statistics

key investment statistics

Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.

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