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The tech heavy Nasdaq has been leading the way in 2023 after a horrendous prior year performance.  As we leave the month of April, the Nasdaq has gained about 16% year to date, led by familiar big tech names like Amazon, Meta, Google, and don’t forget Microsoft.  The sales numbers have been impressive…Amazon clocking in with over $100 billion in quarterly sales, Google (Alphabet) with more than $60 billion, and Microsoft with over $50 billion.  As the arms race for AI takes off, there seems to be cash available for the perceived next big idea.  At the midway point of earnings season, about 75% of companies have beat expectations and through the first quarter, $77 billion has flowed into equities.  This, along with tight employment, will hopefully portend a “soft landing” for the economy and maybe even softer inflation rates.

During a recent interview, growth stock investor Cathie Wood remarked that “innovation solves problems”.  That is one of the beauties of investing, entire industries seemingly come out of thin air when the times get tough.  Most recently, the pandemic brought us Zoom Video which is now a $22 billion dollar household name.  Think of Moderna, another pandemic problem solver. And as we come out of an unprecedented economic shutdown that inadvertently is causing a major shortage of workers, witness the lowest unemployment since 1969, Amazon is adding about 1000 robotic “workers” per day.  “That means Amazon could have more robots than employees by the year 2030” continued Wood.  Innovation and savings are the keys to economic growth and it’s hard to bet against the ingenuity that is here at home and around the world.

It has been a good month for Philadelphia…Not only are the Eagles vying to be in the NFSC championship game but the Philadelphia Exchange indices are leading the way in the market.  Look at the PHLX Gold/Silver index up 12% year to date, PHLX Semiconductor index up 10%, and the PHLX KBW Bank index up 6%.   A late day rally on Friday has helped give stocks a nice run to start the year and three positive weeks for the Nasdaq.  To quote two of our most famous traders from the Philly exchange (by way of the movie, Trading Places) Louis Winthorpe III “Looking good, Billy Ray.”  Billy Ray Valentine “Feeling good, Louis.”

With stocks and fixed income both in the red this year, we continue to remind people that “there is always a bull market somewhere”, making the case for a diversified portfolio. 2022 to date has certainly tested the resolve of investors, the classic 60-40 stocks to bonds allocation model is suffering its worst performance since the Great Depression, currently down about 18%. We have had some re-assuring good news in several stocks that many of our clients own (full disclosure). For example, a huge spike in energy costs has lifted Chevron up 56% year to date. In the arena of health and biotech, Regeneron just recently had the first FDA approval for an eczema treatment (Dupixent) for adults. The stock is up 17% this year. With the attention and funding going into infrastructure projects, combined with high crop prices, John Deere has managed a 15% increase this year. Finally, as the Fed combats inflation with higher interest rates, regional bank NBT is up close to 24%. The point is that stocks move with the market in both bull and bear markets, but having a diversified portfolio with investments that don’t always correlate with these moves can help mitigate the risks.