Macro Briefing: 19 July 2023

* Extreme heat bakes large parts of the US, Europe and Asia
* Will China deflation/disinflation soon be exported to the rest of the world?
* Investment banking, trading downturn ‘bottomed’, says Morgan Stanley chief
* US GDP growth set to pick up in Q2: Atlanta Fed’s GDPNow model
* Wave of corporate bankruptcies brewing as easy money era fades
* US homebuilder sentiment edges up in July, highest level since June 2022
* US industrial output falls for second month in June
* US retail sales rise for third month, reflecting slow but resilient spending trend:

US tech stocks continue to rise, outpacing broad market this year. Technology Select Sector SPDR ETF (XLK) closed at a record high on Tuesday (July 18). The sector fund’s gain drew support yesterday from its largest holding (23.2% of portfolio): Microsoft (MSFT), which jumped to a record high yesterday after the company announced a new artificial intelligence subscription service for its Microsoft 365 software bundle.

Although the US stock market has rallied sharply so far in 2023, the gain pales next to the tech sector. XLK is up more than 45% year to date, more than double the rise in SPDR S&P 500 ETF (SPY) this year.

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