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  • Writer's pictureWalker Fulco

Promising Signs of Recovery? Financial Market and Economic Update

As we enter the third quarter of 2023, financial markets and the global economy exhibit promising signs of recovery. This update highlights key developments and trends observed during the second quarter, shedding light on the overall state of the financial markets and the broader economic landscape.


Financial Markets:

Global financial markets witnessed a positive trajectory during the end of Q2 2023. Stock markets continued to reach new highs, propelled by strong corporate earnings, accommodative monetary policies, and improving economic indicators. Investors displayed optimism as the global recovery gained traction, with sectors such as technology, healthcare, and renewable energy outperforming the broader market. However, market volatility remained a concern, driven by geopolitical tensions and potential policy changes.


Economic Growth Outlook:

The global economy showed resilience and regained momentum during the second quarter of 2023. Major economies experienced robust growth, fueled by a combination of factors including increased consumer spending, improving labor markets, and government support. The United States, China, and India led the way, with other regions like Europe and parts of Asia-Pacific also witnessing gradual economic recovery. However, risks such as inflationary pressures and supply chain disruptions persist and require careful monitoring.


Inflation Pressures:

Inflation continued to be a prominent theme at the end of Q2 2023. Rising commodity prices, including energy and raw materials, coupled with supply chain bottlenecks, contributed to elevated inflation rates in several economies. Central banks closely monitored these developments, considering the potential implications for monetary policy decisions. Balancing the need to support economic growth

while managing inflation will be a key challenge in the coming quarters.


Central Banks Policies:

Central banks maintained accommodative monetary policies throughout the second quarter, prioritizing economic recovery and job creation. However, some central banks started signaling a gradual shift towards normalization, acknowledging the need to address inflationary pressures. Market participants closely watched for any hints of policy changes, as they could impact interest rates, asset prices, and overall market sentiment.


Technological Innovations:

Technological advancements continued to shape various sectors, driving innovation and productivity gains. Artificial intelligence, blockchain, and digitalization remained at the forefront, enabling companies to streamline operations, enhance customer experiences, and adapt to changing market dynamics. Governments and businesses alike recognized the importance of investing in digital infrastructure and fostering a digitally skilled workforce to remain competitive in the evolving global economy.


Geopolitical Developments:

Geopolitical tensions continued to influence market sentiment at the end of Q2 2023. Trade disputes, territorial conflicts, and geopolitical rivalries introduced uncertainties that impacted certain markets and industries. Investors monitored these developments closely, evaluating the potential risks and implications for their portfolios.


Conclusion:

The end of Q2 2023 brings positive signals of recovery in financial markets and the global economy. Stock markets reached new heights, economic growth gained momentum, and technological innovations fueled optimism. However, challenges such as inflationary pressures, supply chain disruptions, and geopolitical tensions require continued vigilance. As we move into the next quarter, market participants will closely monitor central bank policies, geopolitical developments, and evolving

economic indicators to navigate an ever-changing landscape. Adaptability and strategic decision making will be crucial for investors and businesses seeking to capitalize on emerging opportunities while mitigating risks.


We extend our gratitude to all our esteemed clients for taking the time to read this financial market and economic update. We appreciate your continued trust and confidence in our firm’s ability to navigate the complexities and opportunities of the global economy.


Sincerely,

Walker Fulco

Investment Advisor

Fulco Capital Management, LLC

910 Pierremont Rd, Suite 410

Shreveport, LA 71106

Office: (318) 861-8622

Fax: (318) 862-8623


WWW.FULCOCAPITAL.COM

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal.

Advisory Services Offered Through Fulco Capital Management, LLC. A State Registered Investment

Advisor. Investment Advisor Representatives may only conduct business with residents in

Louisiana and Texas. Therefore, a response to a request may be delayed until appropriate registration is obtained or an exemption from registration is determined.


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Fulco Capital Management, LLC provides a broad array of fundamental equity and fixed-income strategies designed to meet the long-term goals of institutional and individual investors. FCM’s multiple independent investment teams have the autonomy to pursue investment decisions guided by their individual philosophies and strategies. Risks associated with Fixed Income investing: Many investors consider bonds to be “risk free” investment vehicles. Historically, bonds have indeed provided less volatility and less risk of loss of capital than has equity investing. However, there are many factors that may affect the risk and return profile of a fixed-income portfolio. The two most prominent factors are interest-rate movements and the creditworthiness of the bond issuer. Bonds issued by the U.S. government have significantly less risk of default than those issued by corporations and municipalities. However, the overall return on government bonds tends to be less than these other types of fixed-income securities. Investors should pay careful attention to the types of fixed-income securities that comprise their portfolio and remember that, as with all investments, there is the risk of the loss of capital. This material may include forward-looking statements. These statements are not historical facts, but instead represent only beliefs regarding future events, many of which, by their nature, are inherently uncertain. You should not place undue reliance on forward-looking statements as it is possible that actual results and financial conditions may differ, possibly materially, from the anticipated results and financial conditions indicated in these forward-looking statements. There are uncertainties, unknown risks, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these statements. The statements above are based on the views of the advisor and are subject to change. The information presented is for discussion purposes only, is not an offer, and should not be relied upon as the sole factor in an investment-making decision. The views and opinions expressed are not necessarily those of the broker/dealer, or any affiliates. Nothing discussed or suggested should be construed as permission to supersede or circumvent any broker/dealer policies, procedures, rules, and guidelines. The information presented is not tax, investment, or legal advice. Prospective investors should consult with their financial professionals. Be sure to consider your financial needs, goals, and risk tolerance before making any investment decisions. FCM does not provide legal, tax, or accounting advice. Any statement contained in this communication concerning U.S. tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Before making any investment decisions, you should obtain your own independent tax and legal advice based on your circumstances. Definitions The federal funds rate, known as the fed funds rate, is the target interest rate set by the Federal Open Market Committee of the U.S. Federal Reserve. The target is the Fed’s suggested rate for commercial banks to borrow and lend their excess reserves to each other overnight. Duration incorporates a bond’s yield, coupon, final maturity, and call features into one number, expressed in years, that indicates how price-sensitive a bond or portfolio is to changes in interest rates. Bonds with higher durations carry more risk and have higher price volatility than bonds with lower durations. Reinvestment risk is the possibility that an investor will not be able to reinvest cash received from an investment, such as interest earned or coupon payments received, at a rate of return that is equal to or better than the original investment’s current rate of return. Total return, when measuring performance, is the actual rate of return of an investment or a pool of investments over a given period. Total return includes interest, capital gains, dividends, and distributions realized over the specified period. Total return accounts for two categories of return: income including interest paid by fixed-income investments, distributions, or dividends and capital appreciation, representing the change in the market price of an asset. Indices The S&P U.S. Treasury Bill 0-3 Month Index measures the performance of U.S. Treasury bills maturing in 0 to 3 months. The Bloomberg U.S. Aggregate Bond Index is composed of the total U.S. investment-grade bond market. The market-weighted index includes Treasuries, agencies, commercial mortgage-backed securities (CMBS), asset-backed securities (ABS) and investment-grade corporates. The Bloomberg Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. “Bloomberg®” and the Bloomberg U.S. Aggregate Bond Index and Bloomberg Municipal Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Raymond James Investment Management or FCM Asset Management. Bloomberg is not affiliated with Raymond James Investment Management or Fulco Capital Management LLC, and Bloomberg does not approve, endorse, review, or recommend FCM’s fixed-income strategies. Bloomberg does not guarantee the timeliness, accuracy, or completeness of any data or information relating to FCM’s fixed income strategies. Indices are unmanaged and one cannot invest directly in the index.
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