Weekly Market Commentary

Weekly Market Commentary – 5/19/2023

-Darren Leavitt, CFA

Investors were treated to a week of gains for US indices, while US Treasuries fell significantly across the curve. Early in the week, there was cautious optimism around debt ceiling negotiations as both sides agreed to the need for bipartisan talks. Mega-cap technology continued to lead the market, with Google, Nvidia, Microsoft, and Meta all making new 52-week highs. Newmont’s 19-billion-dollar takeover announcement of Newcrest and Oneok’s 18.8-billion-dollar acquisition of Magellan Midstream fostered positive sentiment. Similarly, the statement that the UK had approved Microsoft’s takeover of Activision aided the tone.

On the other hand, Fed rhetoric pushed back on the notion that the Fed was done with its rate hiking cycle. Dallas Fed President Logan suggested that recent data did not support a pause in June. Chairman Powell echoed his post-FOMC meeting remarks on Friday at a speech in Washington that reiterated the Fed’s mandate of 2% inflation and left the door open to more rate hikes. Investors also had to contend with the announcement on Friday that debt ceiling negotiations had ended without a resolution and the recognition that both sides were still nowhere near an agreement. President Biden amended his plans for the G7 meetings to return to Washington on Sunday, hoping to restart the negotiations on Monday.

The S&P 500 gained 1.6%, the Dow added 0.4%, the NASDAQ climbed 3%, and the Russell 2000 jumped 1.9%. It was an ugly week for Treasuries as investors contemplated if the Federal Reserve was finished with hiking rates and a debt ceiling compromise could be forged. The 2-year yield increased by twenty-nine basis points to 4.27%, and the 10-year yield rose by twenty-three basis points to 3.69%. Interest-sensitive sectors- Utilities and Real Estate sold off with Treasuries.    Oil prices gained 2.2% or $1.60 to close at $71.76. Gold prices fell by $36.90 to $1981.80 an Oz.  Copper prices closed unchanged for the week at $3.73 a Lb. The US Dollar traded slightly higher on the week.

Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness.  All such third party information and statistical data contained herein is subject to change without notice.  Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person.  Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures.  All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

 

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Investment advisory services offered through Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser. Nothing on this website constitutes investment, legal or tax advice, nor that any performance data or any recommendation that any particular security, portfolio of securities, transaction, investment or planning strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations, execution of required documentation, and receipt of required disclosures. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #175083.

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