Monday Minute
By Hightower Bellevue on May 22, 2023
Despite the debt ceiling drama, uncertainty around the Fed’s next move, and turmoil in the banking sector, the equity markets managed to pull out a positive result from last week. The Dow finished up 0.4%, the S&P 500 up 1.6%, and the NASDAQ shined with a positive 3% move. The usual suspects in the tech sector carried much of the weight as they have all year. Bonds traded lower on the week with the U.S. Aggregate down 1.3% as rates ticked up slightly. The consumer remains somewhat resilient which is giving hope the much discussed upcoming recession should be a mild one. This is allowing investors to look past the current slowdown and into the eventual recovery. There will surely be some landmines along the way however. According to Mauldin Economics, Chapter 11 bankruptcy filings are up significantly to the highest rate since 2010. More than 230 US companies have filed for bankruptcy this year through April. The fallout is likely to be seen in the high yield bond asset class, and not in your average S&P 500 equity exposure. This week we get additional employment data and hopefully news of a positive debt ceiling negotiation which would be positive for the markets. Q1 earnings reports are also finishing up. So far, 95% of S&P 500 companies have reported earnings, of which around 77% beat earnings expectations according to Refinitiv data. The blended growth rate for the quarter is -2.2%. On average, earnings continue to prove better than analysts’ expectations. Markets are starting off the week mixed again.
https://www.cnbc.com/2023/05/21/stock-market-today-live-updates.html