FNBO Releases '2023 Mid-Year Investment Update'

FNBO Releases '2023 Mid-Year Investment Update'

OMAHA, Neb. July 18, 2023 — First National Bank of Omaha (FNBO) has released its 2023 Mid-Year Investment Update. ​​Prepared by the investment team, the report follows the FNBO 2023 Investment Outlook, providing an in-depth assessment on the current state of the economy.

“The U.S. economy has been resilient with a contraction first occurring in housing and now 'rolling' through manufacturing. If unemployment remains at low levels, a recession may be avoided due to continued growth in consumer spending. Our base case, however, remains a mild economic downturn due to our expectation of a weakening labor market,” said Kurt Spieler, Chief Investment Officer.

As outlined in the report and by National Bureau of Economic Research indicators, FNBO sees several pillars indicating a mild recession over the next few quarters:

• EMPLOYMENT: The number of workers quitting their jobs is a measure of labor market slack. The U.S. Department of Labor reported initial unemployment claims rose to the highest level since October 2021. If this trend continues, wage growth may slow, which could help lower the level of inflation.
• REAL ESTATE: The industry seems to have adjusted to the current level of interest rates, but likely needs lower mortgage costs and improved affordability before a complete recovery occurs.
• COMMERCIAL BANKING: Banks incrementally tightened lending standards over the past year, well before stress in the banking system emerged. Although additional bank failures are possible, FNBO doesn’t anticipate further systemic issues in banking.

Stock market leadership is from the information technology, communication services and consumer discretionary sectors. Persistent inflation could lead to higher interest rates and lower valuations; and corporate profitability may contract if a mild recession occurs.

The full report—which provides additional insights, data and analysis, including in the areas of the stock market, consumer spending and industrial production—can be read here.

About FNBO
First National Bank of Omaha (FNBO) is a subsidiary of First National of Nebraska. First National of Nebraska and its affiliates have nearly $30 billion in assets and 5,000 employee associates. Primary banking offices are located in Nebraska, Colorado, Illinois, Iowa, Kansas, South Dakota, Texas and Wyoming. Founded in 1857, FNBO has maintained its commitment to helping build strong communities for more than 165 years. Learn more at FNBO.com and connect with us on Facebook, Twitter and Instagram.

For information contact:
Sally Christensen, 402-871-1933
schristensen@fnbo.com