Dumaine Investments Weekly Market Update – June 6, 2023
• After an initial rally on Friday in response to the debt-ceiling resolution, US stocks have traded flat so far this week. Major indexes are bumping up against technical resistance levels, making the path toward further gains more challenging, especially without fresh catalysts.
• Analysts appear to be growing increasingly skeptical about the conditions for a sustained market rally, as productivity numbers and corporate profits have stagnated while inflation remains stubbornly high. Moreover, as noted in prior commentaries, the strength of the market surge to date has been on the back of a handful of technology and communications companies—largely tied to AI development—with few indications of sustainable growth in the broader market.
• In the week ahead, all eyes will be on US inflation and balance of trade data, prior to the Fed meeting next Wednesday. May inflation data will be released the day prior to the meeting, and is likely to be meaningful in the Fed’s rate decision and accompanying statements. As of today, the FedWatch tool shows a 79.5% probability of a pause in raising rates at the central bank’s mid-June meeting.
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.