[My Predictions for the 2nd Half 2023] And A Recap of the First Half

Let’s start by recapping the biggest events of each quarter, and predict what's in store for the future. Picks from the Editor SPONSORED (Newsletter Continues Below) [These Patterns Have Remarkable Success Rates](  Learn the 5 unique price patterns that have amassed incredible win rates in our historical testing. Plus their exact details and how to spot them on any stock chart. Register for the free pattern trader workshop now.  [Show me that Pattern](  By clicking the above links, you agree to the Wealthpress [Privacy Policy]( [Discover it Now!]( Through the Rearview Mirror and Into the Crystal Ball of 2023  Hi Traders,  The first six months of 2023, from my viewpoint, were quite a show with the broader market flexing its muscles. The S&P 500 gained 16%, the Dow climbed 3.8%, while the tech-heavy NASDAQ made an impressive leap with a 32% surge.  It wasn't exactly a smooth stroll in the park though. Wall Street had its share of challenges in the first two quarters. And here we are, trying to sift through the year's major events, quarter by quarter, and present you with my grand prediction for the rest of 2023.  It's got something to do with the folks at the Federal Reserve, but more on that later. Let's also look into the stocks that are worth your attention in this current market climate.  The first quarter painted quite a mixed picture. It kicked off with a burst of optimism but the enthusiasm was quickly doused when the banking crisis reared its ugly head.  March was particularly harsh when the Silicon Valley Bank collapsed, marking a new low in U.S. history with the second-largest bank failure.  Credit Suisse and Signature Bank weren't far behind. The second quarter saw First Republic Bank take the plunge. Consequently, the S&P Regional Banking ETF (KRE) dropped about 25% during the quarter.  The Federal Reserve seemed to add salt to the wound by raising key interest rates by 25 basis points, pushing the federal funds rate from 4.75% to 5%, a level we haven't seen since October 2007.  However, let's not forget that the indices managed to claw their way up by the end of the quarter, with the S&P 500 growing 7%, the Dow barely scraping through with an increase of 0.4%, and the NASDAQ jumping 16%.  The second quarter offered more promise for the stock market. The NASDAQ scaled up 13.1%, while the S&P 500 and the Dow rose 7.9% and 2.4%, respectively.  The underdogs, small-cap stocks, also held their ground with the Russell 2000 rising 4.8%. Much of this strength was witnessed in June, as the Russell 2000 surged 8.4% due to the Russell Reconstitution.  The summer breeze brought some respite in June, with the Federal Open Market Committee (FOMC) unanimously voting to "pause" key interest rates.  However, the plot thickened with analysts being caught off guard by the Fed's "dot plot" revelation of more forthcoming rate hikes.  This projection makes us brace for interest rates to be as high as 5.6% by the end of the year, implying two more rate hikes.  The energy market shared the limelight in the second quarter due to the devastating Canada wildfires that started in late April. With over 400 active fires burning through more than 8.1 million acres of land, the usual 600,000 acres at this time of year seem trivial.  These fires throttled Canada’s crude oil output, which subsequently bore down on energy stocks.  Now, the second half of 2023 holds its share of suspense, and here comes my biggest prediction.  Come December, the Federal Reserve will be seen cutting rates. And this trend will continue into the early months of 2024.  The U.S. manufacturing sector is still floundering in a recession, making it unwise for the Fed to raise key interest rates in its July meeting. Inflation too is cooling off, and with the positive CPI and PPI reports, I believe the Fed should hold off on any rate hikes in July.  Now, the million-dollar question is, how do you separate the wheat from the chaff? It's no rocket science. You can’t go poor with betting on solid fundamentals, right?  Keep on keeping up!  John @ Traders on Trend  (In the next article: AI starting to lose love? Really? Find out below! 👇) Sponsored [Maximize Your Returns with the Best Stock of 2023]( We are excited to present you with an incredible investment opportunity that promises resilience and substantial growth in the years to come. Our dedicated research team has awarded this recession-proof company with our highest rating, making it a valuable addition to any portfolio.[Go HERE to Learn More]( By clicking this link you are subscribing to The Daily Stock Watcher Newsletter and may receive up to 2 additional free bonus subscriptions. Unsubscribing is easy [Privacy Policy/Disclosures]( Check the Free Presentation Today ☝ SPONSORED The Looming 'dot AI' Bubble  Emad Mostaque, CEO of open-source AI firm, Stability AI, sees a colossal tidal wave brewing. According to him, artificial intelligence (AI) is gearing up to become the most gigantic economic bubble in human history.  You heard it right, not just big, but the largest ever! A pretty bold claim.  During a recent chinwag with UBS analysts, Mostaque let out an intriguing notion. He opined that while AI holds unbound potential, we're yet in the infancy stage of its development.  He doesn't see it being ready for large-scale adoption, particularly in sectors like banking. In his own words, he referred to the impending scenario as the 'dot AI' bubble, which hasn't even gotten off the ground just yet.  Why should you lend an ear to Mostaque?  Stability AI, the firm he heads, is renowned for Stable Diffusion, an impressive generative AI tool. This nifty tool enables users to generate strikingly realistic images from mere text inputs. With over a million users and a whopping $100 million plus in funding, its influence is noteworthy, even in a landscape peppered with competitors like OpenAI.  Now, it's worth mentioning that Mostaque's credibility has been put to the test. He's faced accusations of embellishing his accomplishments and background, and overstating partnerships.  (article continues below) Sponsored [Your Money Under Threat: Don't Let History Repeat!]( From Brazil in 1990, Cyprus in 2013, to Canada in 2022, governments have frozen bank accounts when least expected. Now, under the guise of Federal Reserve System Docket No. OP-1670, the Fed has a plan that could take tracking to a whole new level. From your account balance to every transaction, nothing is off-limits! [Learn how to keep your finances secure here.]( [Privacy Policy/Disclosures]( SPONSORED  🔼 Pay attention, this is worth your time! ☝  (article continues)  To clear the air, he meticulously responded to each allegation on his personal blog.  Generative AI, such as Stable Diffusion, has captured minds worldwide, from academic circles to eager students, and boardroom bigwigs.  With its capacity to spawn human-like language and visual content from scratch, using heaps of data, the fascination is understandable.  AI has wormed its way into various aspects of our lives, ranging from online browsing and social media to home assistants. It's also carving its niche in fields like medicine, robotics, science, education, and defense, amongst others.  Mostaque envisions an astronomical figure - $1 trillion, as the requisite investment in AI, underscoring its paramount importance as a knowledge infrastructure, even eclipsing 5G.  He envisions financial mammoths like UBS integrating AI into their core operations, given its extensive market scope.  Nevertheless, he acknowledges that we're at the dawn of AI's evolution. While he sees the immense value, he admits that it isn't quite ripe for large-scale deployment, particularly in sprawling sectors like financial services.  Moreover, Mostaque warns of the potential downfall of companies failing to assimilate AI aptly into their operations.  He foresees a stringent stock market penalty for such entities. He points to Google's fiasco when the Bard AI chatbot misinformed in a promo video, causing a jaw-dropping $100 billion loss in a day.  This incident highlighted the fierce competition to perfect AI tools, with giants like Google and Microsoft vying for supremacy.  To sum it up, Mostaque holds a steadfast belief that AI will shape one of the most significant investment trends in the upcoming years. But is the time now? It remains to be seen.  Disclaimer:  The material in this document is for informational purposes based on our proprietary research. It is not an offering, specific recommendation, or a solicitation of an offer to buy or sell any securities mentioned or discussed herein.  Any performance results discussed herein represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.  Due to the timing of information presented, any investment performance reflected within this document may be adjusted after the publication and distribution of this material. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, be equal to any corresponding indicated historical performance levels or be suitable for your portfolio.  Any investment results set forth in this document are not net of expenses and execution costs, nor do they account for other relevant trading or investment fees. 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