Market Summary – May 15, 2023

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Last Week’s Summary:

▪ S&P 500 Index fell 0.24%
▪ International Equities fell 0.74%
▪ Emerging Markets fell 0.86%
▪ U.S. 10-Year Treasury Yield rose to 3.46%
▪ CPI fell to 4.9%; Core CPI fell to 5.5%
▪ Initial Jobless Claims rose to 264k
▪ PPI fell to 2.3%; Core PPI fell to 3.2%
▪ U. of Mich. Sentiment fell to 57.7

What to Watch for This Week

▪ M, 5/15/23 Empire Manufacturing
▪ T, 5/16/23 Industrial Production, Retail Sales,
Business Inventories
▪ W, 5/17/23 MBA Mortgage Applications
▪ Th, 5/18/23 Initial Jobless Claims, Leading

Weekly Market Recap

Stocks and bonds struggled as Wall Street lost
confidence in the Federal Reserve’s decision to
pause its interest-rate hiking cycle. Consumer
sentiment fell after a widely followed survey
conducted by the University of Michigan
revealed that consumers anticipate a 3.2%
annual increase in prices over the next five to
ten years. Adding to the concerns, the latest
readings on the Consumer Price Index (CPI)
and CPI Core indicated a 0.1% decrease from
the previous readings, resulting in respective
inflation rates of 4.9% and 5.5%. While
inflation remained persistent, jobless claims
rose to 264k, marking the highest level since
October 2021 and signaling a slight softening
in the labor market. Investor worries were
further intensified when Treasury Secretary
Janet Yellen renewed the call to raise the debt
limit, warning that failing to do so would
negatively impact the country’s credit rating. In
a worst-case scenario where the U.S. defaults
on its debt, Secretary Yellen explained that the
government would have to default on certain
obligations, likely either payments to Social
Security recipients or short-term Treasury bills.
Consequently, the yield on 1-Month Treasury
bills skyrocketed above 5.5%, climbing more
than 110 basis-points in just two weeks since
the beginning of the month. Several Federal
Reserve officials acknowledged this week that
if price pressures persist, another rate hike
might be necessary.

Market Summary

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