Economic Update 5-23-2023
- Economic data for the week included increases in retail sales and industrial production, mixed regional manufacturing and housing results, and a decline in jobless claims.
- Global equities were higher for the week, with an absence of negative economic data, with a stronger dollar dampening foreign stocks a bit. Bonds lost ground due to rising interest rates. Commodities were led higher by stronger crude oil and natural gas prices.
U.S. stocks were higher overall on the week, with sentiment increasingly tied to U.S. debt limit negotiations. Signs of positivity mid-week were followed by less enthusiasm by Friday as plans hit a ‘pause.’ It appears that Congress and the President have been ramping up efforts to find a debt ceiling deal, with a rising consensus the Treasury will exhaust funds in early- to mid-June. That said, while the meeting frequency is ramping up, and the President appears to be shortening an upcoming Asia trip to work on this, a final deal does not seem imminent yet. Democrats have even attempted a ‘discharge petition,’ with an attempt to gather the support of moderate Republicans; however, the unique requirements make it less likely to succeed. Unlike prior episodes, though, stock market volatility during this debt episode has been muted, although signs of progress did help the market upward mid-week.