Welcome to the July 2023 edition of Making Money Moves, an overview of the most pressing economic trends and investment insights based on up-to-the-minute market updates.
Read on to learn what the current state of the economy means for your financial and investment strategies as we continue into Q3.
Overview of the Economy
In the United States, GDP growth leveled out mid-year after an approximately 1.5% to 2.0% expansion in the year’s first half.
A gloomy business outlook has contrasted with high consumer spending. However, consumer spending is expected to slow in the year’s second half, fueling economist predictions of an impending recession.
Post-Pandemic Recovery
The United Nation’s WESP reports somber prospects as the effects of the COVID-19 economic downturn linger, particularly in developing nations where the GDP’s marginal growth hints at continued economic stagnation, particularly in Africa and Latin America.
Notably, global trade has a bleak predicted growth of the 2.3% by the end of 2023, despite 2022 showing optimistic pre-pandemic volumes.
In the United States, a Monmouth University poll published on July 19 reports that 30% of respondents believe the economy has recovered better than other countries, while 32% said the country’s post-pandemic recovery was worse.
A further 33% felt that the U.S.’s recovery is about the same as other countries.
Stock Market
A stock rebound is hinting at an emerging bull market.
While it’s still too soon to say that the bullish trajectory will continue, we’ve seen consistent growth in the DJI since it hit a low in September 2022 at $28,682. As of July 19, 2023, the DJI sits at $35,061, reflecting a 22.2% increase.
Similarly, NASDAQ and S&P 500 are trending upwards, while the Currencies, Rates & Bonds, and Commodities markets are on a downturn.
Inflation
While inflation is still up, the relatively moderate 0.2% CPI increase in June is an optimistic sign after it hit a 14-year high in March 2023. This reflects a year-over-year increase of 3.0% before seasonal adjustment.
Housing, which has risen 7.8% since June 2022 and 0.4% since May 2023, contributed over 70% to the increase but was offset by the 16.7% decrease in the energy index over the last year.
Oil and Precious Metals
IEA, OPEC, and the U.S. Energy Information Administration agree on predictions of an oil supply crunch.
Saudi Arabia announced its plan to reduce oil production by 1 million barrels daily through August at the June OPEC meeting. Russia followed suit, cutting barrel production by ½ million per day.
In response, the IEA announced that oil demand will likely overtake supply for the next five quarters.
Precious metals remain stable, but be aware of impending silver and copper scarcity. With an 18% growth in demand since 2021, silver, in particular, is in an ongoing deficit as silver mine output continues to fall.
Cryptocurrencies
Following cryptocurrency crackdowns in June, the U.S. Securities and Exchange Commission ended July by accepting six funds’ applications for spot bitcoin exchange-traded funds after NASDAQ agreed to work with Coinbase to regulate and surveil crypto trading.
This new development likely surprises those following crypto legislation, given the SEC’s history of rejecting such applications in the past due to concerns over anti-fraud and investor protection concerns.
Financial Planning Strategies
In light of commodities and currencies markets on the downturn and the stock market on the rise, now is the time to invest in stocks.
- Research long-term investments in tech companies, which make up a large proportion of growth stocks
- Pay off high-interest debts
- Budget to make an extra annual mortgage payment
- Open a high-yield savings account and contribute generously
Benefits of Making Smart Money Moves Now
Your money should be working for you, not the other way around. Building a diverse investment portfolio today is the first step toward a more financially comfortable future.
Short-Term Gains
Short-term investments offer quicker returns but be prepared to immerse yourself in the market. With a firm grasp on the constantly fluctuating conditions, you gain the control and flexibility necessary to make swift adjustments to mitigate losses.
Long-Term Security
While short-term gains are tempting, long-term investments can potentially yield higher returns if you play your cards right. They allow you to create a diverse portfolio that is less vulnerable to the ebbs and flows of short-term market volatility.
Resources to Help You Get Started
Do you want to make your own money moves? Start with these trusted resources to track the market and gain invaluable investment insights.
Conclusion
With that, we bring our July 2023 Economy Snapshot to a close.
While growth worldwide is stagnating, there is hope for stock investors who capitalize on a trending bullish market. At the same time, those with a mind for digital currency should keep an eye out as crypto potentially makes its way into the mainstream money market.
Making smart, well-informed money moves today can secure your financial future. Don’t wait. Start your investment portfolio and watch your returns grow.
Related: Here’s How the 52-Week Money Challenge Can Change Your Life