top of page
Scott Poore, AIF, AWMA, APMA

Positive Debt Ceiling News Helps Stocks

Some equity sectors rallied last week on positive news on the debt ceiling front. The economic data was largely positive last week, but that was over shadowed by the drama surrounding the debt ceiling.

The broad indices were down more than 1% in the middle of last week, but rallied Thursday and Friday when it was announced the negotiators were getting close to a deal on the debt limit. Over the weekend, it was officially announced that there was a deal "in principle" and that the House would be taking up the measure today after the Memorial Day holiday. There are still a few hurdles to clear as hardliners in the two Congressional parties will need to be convinced of the deal, but most commentators expect the bill to be approved before the June 5th deadline.


There was positive news on the economic front last week. First quarter GDP was revised higher to +1.3% from the initial reading of +1.1%.

Personal Spending was considerably higher in April (+0.8%) than in March (+0.1%). March's reading was actually revised higher from the previously reported flat reading. In addition to strong consumer spending, jobless claims are moving lower. Last week's Initial Jobless Claims was lower than expected, and the previous week's reading was revised lower by 13,000. The Chicago Fed's Financial Conditions Index continues to point to "loose" financial conditions unlike previous recessions. The Fed futures on next month's FOMC meeting have flipped to indicate the Fed may give us one more hike. We'll have a few Fed speakers this week to digest hawkish/dovish language and the Jobs Report for April to absorb this week.


 

Disclosures


The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.


Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.


Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.


Past Performance does not guarantee future results.

Comments


bottom of page