Flagship Pod 82: Welcome to Q3


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Now let's get into what we reviewed.


Here are the 4 key things we went over:

  • Why the first half of 2023 was essentially an extended winning period for the Nasdaq

  • How Nike finally faltered in their earnings report last week

  • Where we see the markets moving in the second half of 2023

  • What the latest slate of Supreme Court decisions will do to the markets

And if you're too busy to listen to the entire recording, below we included a compact summary of what went down.

To get all the juicy details, just listen to the entire recording.

And now, onto the summary 👇


As we lapse into the slower summer months, it sure feels like the first half of 2023 ended with a bang. The Nasdaq is up 39% on the year, the Dow Jones recovered, and the S&P 500 is doing great. 

If we told you back in January that we would experience a major bank collapse and the market would keep ripping, you'd likely call us insane.

And yet, here we are. The AI-fueled tech boom is pushing growth without pushing inflation. Inflation keeps coming down every month even with unemployment stubbornly high. 

There's a lot to like about this market, but there's also a lot to learn in terms of where spend is flowing and what people are doing as wallets keep getting tighter and tighter. 

The halfway mark for 2023 looks really impressive, so let's find out what the market is going to do to achieve a thrilling conclusion👇


How Q2 Ended:

We learned a lot from the last 3 months, but as the closing bell sounded for the quarter we honestly got some solid insights into where consumer spending is headed.

Nike reported earnings that drove its stock down and sparked a lot of debate amongst Wall Street analysts.

Basically, while Nike met revenue expectations they just barely missed earnings by a few cents per share. After years of being functionally bulletproof, higher costs are finally catching up to Nike, driving the stock price down. With elevated inventory, Nike was forced to be a little more promotional than usual, but the real good news here is that Nike is finally getting out from under their inventory issues. 

We're still bullish on the stock, but the fact of the matter is Nike is starting to show the cracks we're worried about in consumer spending.


The 2023 Outlook:

And once again, a lot of debt is fueling this economy. And now that the Supreme Court just struck down student debt forgiveness for ~43 million Americans, those debt issues may get even tighter. 

But in the same breath, the U.S. revised their GDP estimates for Q1, showing that the economy actually grew 2% instead of just 1.3% as previously estimated. This is awesome because the Fed has been massively slowing the economy down to get inflation under control, and it looks like they 'may' hit this soft landing that they've been talking about for years at this point. 

That's what so wild about this economy. Inflation gets more and more under control every month, despite unemployment refusing to rise. Spending is staying strong despite record-low sentiment, and U.S. banks keep surviving every stress test the Fed throws at them. 

While the Moby.co analyst team is maintaining a cautious outlook for the short term, it's hard to deny that maybe the "vibecession" of the last year is finally starting to crack a little and bulls are getting more and more in control. 

We're still a black swan event or two away from crashing this house of cards, but it's nice that we're entering into the July 4th break on a high like this. 

Which makes it funny that this week we were introduced to President Biden touting "Bidenomics" as the policy that got us out of the mess left by COVID.

Fed policy and the Inflation Reduction Act really did reduce inflation, and even though the Supreme Court just nuked one of Biden's major policy goals that got him elected (e.g. student loan debt), he may still be able to guide the economy away from a full recession and cruise to re-election next year. 

Given his historically low approval rating (which he's been saddled with for over a year), it is genuinely wild that this is an ever-more-real possibility. 

But again, we're going to stay focused on long-term trends in the market so we don't get burned by price actions in the short term.

We're finding more and more solid winners in the AI space as we separate the contenders from the pretenders (more on that later this week) and there is still clearly a lot of money to be made in this market. 


Wrapping This Up:

But now we're entering into the critical month where we see how inflation is doing compared to year-ago numbers where the trend finally reversed.

Once again, we have a really important CPI coming out in the next few weeks that will be really clarifying. 

More importantly, we'll get our first GDP figures for Q2 at the end of this month. Those numbers are going to be critical.

If GDP growth punches through 2% and reverses the decline in growth we've seen, that will be one of the strongest bull signals we've ever seen.

However, it's way more likely we'll get stuck with growth somewhere around the 1% range that will provide way more noise than signal for the economy. 

We have a long way to go through this recovery, but it really looks like we might pull this off.

We'll keep you posted as the market develops.