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“The rivalry is with ourselves. I try to be better than is possible. I fight against myself, not against the other.” ~Luciano Pavarotti

Good evening:

With the first half of 2023 in the books, the U.S. stock market is up more than 16% YTD, ahead of schedule for Tom Lee’s prediction for the market to end the year 25% higher than it began. The Nasdaq 100 had its best start ever, topping 1998, up 39.74% YTD.

In January, Lee cited the “rule of first 5 days” as one reason why the market would rise in 2023. Now, he’s again turning to history.

Since 1950, there have been 22 instances when the S&P 500 is up by more than 10% at midyear, and 82% of the time, the market continued to climb in the year’s second half. This win ratio rises to 89% when the preceding year was a down year (as it was in 2022.) These historical cycles are meaningful and important because, as Lee is fond of saying, there is “nothing new under the sun.”