Q1 Recap (2023)
March 31 marked the end of Quarter 1 (Q1) 2023, and markets continued their winning streak. For the first quarter, the Dow Jones gained 0.42%, the Nasdaq rose 17.67%, and the S&P500 increased 7.46%. This article will take a look into the major economic events of the first quarter, performance metrics, and other important topics.
Let’s first take a look at the performance of the economy in Q1. GDP data for Q1 will be available here on April 27. Meanwhile, GDP increased in January by 0.98% via the latest data.
Inflation continued to trend downward to 6.0% as of February’s latest report. Inflation rose 0.4% in February; March’s data is set to be released on April 12, 2023 at 8:30am EST and can be found here. The Fed has continued to raise rates, but less aggressively compared to prior quarters. The current rates stand at 4.50–4.75%. The Fed’s decisions may become more clear depending on how inflation trends in the coming months.
Today, the Personal Consumption Expenditures (PCE) report was released. A change of 5.0% is noted, which is concurrent with the change in CPI. The full report is available here.
The Fed’s decisions on inflation have also become more difficult due to the banking crisis experienced in Q1. Multiple regional banks have had to close their doors, and others were sold to larger banks. Silicon Valley Bank, Signature Bank, and Silvergate were some of the most notable. Other banks including international ones, such as Credit Suisse, have experienced a collapse.
Despite the economic turmoil, markets have notched major gains as eluded to earlier in the article. Let’s take a look at some of the best performers:
Cryptocurrencies also had a stellar Q1, outperforming most traditional markets, especially as the events of the banking collapse unfolded. Bitcoin gained 71.7% and Ethereum rose 49.37%. Other notable gainers included AI cryptocurrencies, like Fetch.AI which rose 301.64% in Q1.
Speaking of AI, the effects of Chat-GPT have allowed for chip stocks and related cryptocurrencies to skyrocket during Q1. Chat-GPT4 was recently released by OpenAI, and as a result, related industry assets gained.
As we look forward to Q2, inflation remains a top priority for the Fed. The bank crisis has also shifted its way into central view, and managing both will prove difficult for the Fed. Markets may experience volatility throughout this time, or may continue pressing forward, but it will be dependent on the decisions from the Fed.
All information in this article is for educational purposes only and is not to be considered financial advice. Do your own research and consult a financial advisor for advice.
Financial data provided by Google Finance.
