As we enter 2 of the best performing months in a typical year, the Fed has not yet completed its mission to return the US inflation rate to 2%.

Consumers are revenge spending. Beyonce & Taylor Swift concert tours made material impacts on traditional economic data. European travel is peaking.

Overall, the economy has continued to defy expectations of a recession due to resilient consumer spending and a tight labor market. Investors have benefited. However, core inflation remains too high and the full impact on business investment from the Fed’s tightening may not have been realized yet.

By conventional definitions, we are clearly in a bull market. But given that we have entered the summer months, we may find investors seeking some respite from the heat of the markets. Afterall, the Nasdaq had its best seven month stretch since 1975 while the S&P 500 notched its best seven month start to a year since 1997, according to Dow Jones Market Data.

Our market is beginning to broaden with more stocks rising and playing catch up.

Five months into the year, the market has been able to shrug off negative data points that point to a recession in favor of falling inflation, a resilient US consumer and AI growth hype.