The Long View - July 2023

July 06, 2023 | The Simbul-Lezon Wealth Management Group


This month's Long View highlights the positive long-term trend in equity markets, the current 4-year cycle, international equity markets, interest rates and the US dollar, commodities, and equity market leadership.

In this month’s Trend & Cycle Long View:

Secular backdrop

The long-term secular trend for US equity markets remains positive with an underlying 16-18 year cycle supportive of further upside into the mid 2030s, potentially to S&P 14,000.

The current 4-year cycle

The technical backdrop continues to support the case that another 4-year cycle low developed in Q4 2022 similar to many of the prior 4-year cycle lows that developed at support near the rising 4-year (200-week) moving average.

After bottoming in Q4, monthly cycle indicators, tracking 2-4 year moves, continue to build to the upside. Although technology has dominated leadership through 1H 2023, we are seeing early evidence that participation is expanding with more cyclical groups beginning to rebound from Q1-Q2 pullbacks.

International equity markets

The longer-term technical profiles for international equity markets have improved over the past 6-9 months with monthly cycle indicators bottoming in Q4 2022. However, on a relative performance basis versus the S&P 500, most international markets have yet to reverse their longer-term downtrends.

Overall, we believe the technical profiles for many international equity markets remain positive, but we do not yet see sufficient technical evidence to support a major overweight versus the S&P 500.

Interest rates and the US dollar – Cycle peaks in place

We continue to view the highs in Q4 2022 at 4.33% for the US 10-year yields and US dollar to be the highs for the cycle. For now the US 10-year yield remains locked in a trading range between 3.25% and 4.10% with a move outside of that range needed to signal the next directional move. Below 3.25% the next key level is at 2.75-2.5% while a move above 4.10% would suggest further upside toward 4.33% and possibly higher. Similarly, the US dollar index high at 114 marked the highs for the current cycle with 101-102 serving as a tactical support band well into Q3.


WTI Oil remains in a downtrend after correcting from its 2022 high near 130 back to a broad band of support between the low-mid 60s. While WTI remains volatile we continue to expect it to bottom near current levels, with the next key resistance between 80-82.

Gold’s longer-term profile remains positive with Gold testing resistance at the upper end of its 2+ year trading range near 2075. While a pullback continued into June, we view this pullback to have been a healthy short-term pause that is likely to be followed by another rebound with potential to make new highs in the coming months.

Equity leadership

Technology and growth stocks have dominated equity market leadership through 1H 2023. While many investors are understandably concerned about narrow leadership, our view remains unchanged that we are seeing early evidence of participation broadening to other more cyclical sectors and groups, notably industrials.

The challenge for equity markets heading into July’s earnings season is that many of the leading growth stocks remain well advanced above their uptrends and could be vulnerable to profit taking and earnings disappointment following their strong rebounds. Conversely, while we remain optimistic about the recent rotation back to cyclicals following Q1-Q2 pullbacks, they too are overbought in the short-term.

Bottom line: We expect volatility to increase through earnings seasons but view pullbacks in secular and cyclical growth as opportunities to add equity exposure as part of an improving longer-term market cycle that bottomed in Q4 2022.

Should you have any questions, please feel free to reach out.

Your investment team

Marita Simbul-Lezon
Mary Rose Simbul
George Tsolakidis
Scott Donovan


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