Dumaine Investments Weekly Market Update – May 16, 2023
• In a volatile market characterized by uncertainty in debt ceiling negotiations and turmoil in the banking sector, US stocks have traded sideways over the past week. Efforts are being made to break the deadlock as the June 1 debt ceiling deadline draws near but there has been a lack of marked progress. Investors do not quite believe a debt default is coming but nervousness abounds with the yield on the one-month US T-bill rising to new highs of 5.5% on Monday.
• According to Bank of America’s latest survey, pessimism among global fund managers has reached a high for the year, as they flock to cash amid concerns of a looming recession. The poll indicated 65% of survey participants expect a weaker economy with the market rally having stalled as fears of sticky inflation and a potential US default have hurt investors’ risk appetite.
• Another red flag has emerged on the retail front as bellwether Home Depot reported a 4.2% drop in first-quarter revenue and lowered earnings guidance for 2023. This news, combined with a lackluster April Retail Sales report, is another troubling sign for the markets.
DISCLAIMER: The information provided in this blog post is for informational purposes only and should not be construed as financial advice. Investment decisions should be based on individual financial goals, risk tolerance, and consultation with a qualified financial professional.