Although a recession has been the consensus forecast since early last year, the economy has been surprisingly resilient and continues to grow. Despite some indications of a slowing economy, employment has remained healthy, and consumers are still spending money as reflected by increasing consumer confidence. Markets have produced surprisingly good results, with the Standard & Poor’s (S&P) 500 Index entering bull market territory and the NASDAQ 100 Index off to its best-ever start to the year with a 39.35% return in the first half. Technology has again led the stock market as investor optimism over artificial intelligence (AI) drives valuations higher. Confidence in technology stocks was also bolstered by cooling inflation data and the Fed’s hiatus from raising rates at its June meeting. Bond markets participated in the optimism as fixed income investors demonstrated an increased appetite for lower-quality bonds.
