Weekly Market Review May 17, 2023
The disinflation trend continued for the 10th consecutive month in April as the Consumer Price Index (CPI) came in at 4.9%, down from 5.0% in March. While still above the Fed's 2% target inflation rate, the Fed is expected to pause their interest rate hikes after raising the fed funds target range between 5% and 5.25%, a 16-year high. With the pause, the Fed appears to be shifting their focus to the banking sector turmoil and the impact of tighter lending conditions on the economy. (Source: The Wall Street Journal)
The debt ceiling standoff continued to hang over markets with little progress last week. Congress has until approximately June 1st until the U.S. is faced with defaulting on their debt obligations for the first time in U.S. history.
Stocks and bonds have moved mostly sideways in the second quarter after a volatile March. The S&P 500 has traded within a 3% band since the beginning of April, while 10-year Treasuries have traded in a narrow range between 3.3% and 3.6%. (Source: YCharts)
This week, economic data will focus on the housing market with the NAHB Housing Market Index on Tuesday, housing starts and building permits on Wednesday, and existing home sales on Thursday. Additionally, the markets will be focusing on any progress in the debt ceiling negotiations.
WOMEN AS BREADWINNER TRIPLES - Over the past 50 years, the percentage of opposite-sex households where the female out-earns the male has more than tripled, from 5% to 16% of households. Still, a gender pay gap remains; according to Pew Research Center, women earn an average of 82% of what men earn in similar roles. (Source: The Wall Street Journal)
DEBT CEILING PRECEDENT - The U.S. is expected to default on its debt obligations if a deal is not struck by June 1st. If history is any guide, a deal should come through in the end; since 1960, Congress has raised the debt ceiling 78 times, including 20 times since 2002. The U.S. has never defaulted on its debt obligations. (Source: Edward Jones)
HIGHEST PAYING COLLEGE DEGREE -The average salary for recent college graduates is projected to be $55,260 in 2023, but the specific degree can make a big difference. Humanities has the lowest projected salary at $50,681, while engineering and computer science majors have the highest projected salaries at $73,922 and $75,900, respectively. (Source: Bankrate.com)
8TH SEED ADVANCES - The eighth seeded Miami Heat advanced to the eastern Conference finals over the weekend by beating the New York Knicks. The Heat are the first 8th seed to make it this far into the playoffs since the New York Knicks did it 24 years ago. (Source: ESPN)
DISNEY VS. DESANTIS - The ongoing battle between Disney and Florida Governor Ron DeSantis is heating up. The feud started when Disney criticized Florida laws covering sexual orientation and gender identity. Now, Disney is threatening to drop $17 billion in investments that are projected to create 13,000 jobs, accusing Florida of being "anti-business". (Source: USA Today)
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