At a glance

Equity markets rallied despite the Federal Reserve’s increase to its target interest rate in its battle against inflation. Business sentiment indicators point to a still-strong services economy.

chart depicts global health trend at 37.7 trending weak.

Source: Global Economic Health Check, U.S. Bank Asset Management Group, March 24, 2023.

U.S. Bank Global Economic Health Check

The U.S. Bank proprietary Global Health Check incorporates more than 1,000 data points — including business climate factors and economic sector categories for 22 major economies representing 80 percent of total global wealth — to reflect our view of the current strength of worldwide economic growth.

Number of the week:


The NASDAQ Composite’s return so far in 2023. The S&P 500 is up 3.4%.


Term of the week:

Growth stock

Any share in a company that is anticipated to grow at a rate significantly above the average growth for the market. These stocks generally do not pay dividends, because the issuers are usually companies that want to reinvest any earnings they accrue in order to accelerate growth in the short term.


Quote of the week:

“Year-to-date performance leadership is led by growth stocks versus value, with overall performance lacking breadth. The S&P 500 is up 3.4% for the year as of Friday’s close, far below the 13% gain of the technology- and growth-oriented NASDAQ Composite. Additionally, the growth-oriented Communication Services (18.4%), Consumer Discretionary (9.6%) and Information Technology (17.6%) sectors, the worst-performers in 2022, are the only S&P 500 sectors posting gains for the year.”

― Terry Sandven, Portfolio Manager, Chief Equity Strategist, U.S. Bank

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Global economy

Quick take: Global manufacturing activity remains modest, but services businesses are seeing solid activity.

Our view: Our U.S. Health Check highlights positive but below-trend economic activity and decelerating momentum as the Federal Reserve (Fed) tightens monetary policy to combat elevated inflation. Outside the U.S., our foreign scores are below median and slowing.

Equity markets

Quick take: U.S. equities appear rangebound, with the S&P 500 moving between 3,800 and 4,200, impacted by the effects of still-elevated inflation and the Fed’s recent interest rate hike, mixed messaging surrounding uninsured deposits and the approaching kickoff of first quarter earnings reports.

Our view: Inflation, interest rates and earnings remain key to equity returns. Persistent inflation, rising interest rates and uncertainty over the pace of earnings growth in 2023 remain headwinds to advancing equity prices.

Bond markets

Quick take: The Fed increased interest rates last week by 0.25% to a range of 4.75% to 5.00% as a part of its ongoing effort to cool inflation. However, Treasury yields fell following the meeting, reflecting concerns that stress in the financial system will lead to interest rate cuts later this year.

Our view: We favor normal allocations to fixed income, comprised primarily of high-quality bonds, to aid in reducing overall portfolio volatility. Monetary policy and tightening lending standards will play key roles in determining the cost and availability of credit as we approach the second quarter.

Real assets

Quick take: Real assets lagged the broader market last week as policymakers’ actions to ease banking system stress provided a boost to more growth-oriented investments. Commodities were the top performers among real assets, led by a recovery in crude oil prices from the large fall experienced the previous week. Real Estate trailed, unable to shake banking system stress.

Our view: We continue to see value in real assets’ defensive sectors. We favor tangible assets with stable cash flows as the market moves into a year plagued by declines in economic growth and corporate earnings. Commodities remain vulnerable as expectations for falling inflation and decelerating economic growth come to fruition.

This information represents the opinion of U.S. Bank Wealth Management. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. The factual information provided has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. U.S. Bank is not affiliated or associated with any organizations mentioned.

Indexes shown are unmanaged and are not available for direct investment. The S&P 500 Index consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market in general. The NASDAQ Composite Index is a market-capitalization weighted average of roughly 5,000 stocks that are electronically traded in the NASDAQ market. The S&P Global Purchasing Managers' Index data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies.

Insights from our experts

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How we analyze the economy

The economy doesn’t just move in a straight line. Our Health Check assesses its direction and how fast it’s moving.

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Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio.

Diversification and asset allocation do not guarantee returns or protect against losses.

Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments. 

Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility.

Investments in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in fixed income securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities.

Investments in high yield bonds offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer’s ability to make principal and interest payments.

The municipal bond market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issues of municipal securities. Interest rate increases can cause the price of a bond to decrease. Income on municipal bonds is free from federal taxes, but may be subject to the federal alternative minimum tax (AMT), state and local taxes.

There are special risks associated with investments in real assets such as commodities and real estate securities. For commodities, risks may include market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults).

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The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

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