By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The focus in the markets will remain squarely on the discussion(s) surrounding the debt ceiling. Treasury Secretary Janet Yellen has previously suggested June 1 as the ‘x date’ when the Treasury will run out of money to fulfill all of its obligations. With the clock ticking, the threat of a default of some sort is becoming more real. While no one knows what the exact ramifications would be, all agree it would have severe negative consequences that would grow the longer the issue remains unresolved.
- There are multiple Fed speakers on the tapes this week and the release of the minutes from the last FOMC meeting are due Wednesday. There is currently a slight disconnect between Fed rhetoric and market expectations (as measured by futures). The Fed continues to talk tough on inflation and indicating they don’t feel their job is finished, while the market is pricing for a pivot to lower rates later this year.
- The highlight of the economic calendar will be on Friday with the release of the Fed’s favored measure of inflation, personal consumption expenditures (PCE). It is expected to increase 0.3% in April and 4.3% from a year earlier. That would be an increase from the previous month and well above the Fed’s stated goal of 2% over a cycle. PCE peaked at 6.8% last July.
Three Things to Know
- As a result of conflicts between Democratic president Bill Clinton and the Republican Congress over funding for education, the environment, and public health in the 1996 federal budget, the U.S. federal government shut down from Nov. 14 through Nov. 19, 1995, and from Dec. 16, 1995, to Jan. 6, 1996, for 5 and 21 days, respectively. (Source: Wikipedia)
- With last month’s decline, the index of leading economic indicators has now been down 13 consecutive months, a streak second only to the 2008 Global Financial Crisis over the past 40 years. (Source: Haver Analytics)
- Memorial Day is for military personnel who died serving the United States. As of 2023, the U.S. only recognizes 11 federal holidays. Memorial Day is one of them, highlighting its importance for the country and its identity. There is no fixed date for Memorial Day. Commemoration is on the last Monday of May, which could fall between May 25 and 31, depending on the calendar year. The end of May is not a random choice. Historians think it is a strategic date that ensures flowers across the country are in full bloom. (Source: the Fact File)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.