Dumaine Investments Weekly Market Update – May 24, 2023
• US stocks have traded lower over the past week as markets nervously await a resolution to the debt ceiling debacle. What was for a time background noise amid a challenging earnings season and speculation about Fed policy has reached a crescendo: the so-called X date of June 1—when the US can no longer pay its bills and risks default—is now just a week away.
• With negotiations between Republicans and Democrats at a standstill, markets sold off sharply Tuesday afternoon and the market’s volatility index (VIX) jumped earlier today to its highest level in weeks. If no resolution is reached, the most likely immediate outcome would be a sharp rise in short-term rates and a broad-based sell-off in risky assets, with investors flocking to safety.
• Speculation about future Fed policy remains murky as recent comments from senior Fed officials have appeared contradictory, thereby causing even more uncertainty regarding future bank moves.
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.