Broker Check


| June 05, 2023
The Week On Wall Street
Stocks surged higher in the closing days of a holiday-shortened trading week, ignited by a political resolution on raising the debt ceiling and a strong employment report. The Dow Jones Industrial Average rose 2.02%, while the Standard & Poor’s 500 advanced 1.83%. The Nasdaq Composite index gained 2.04% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.52%.
A Sigh of Relief
The weight of uncertainty over negotiations to raise the federal debt ceiling was lifted last week by the news of an agreement between President Biden and House Speaker McCarthy and its subsequent passage in Congress. After a modest gain on Thursday following the House vote, stocks rallied on Friday, responding to the Senate passage of the debt ceiling bill, which eliminated a significant overhang to the market. A robust federal employment report also contributed to the Friday rally. The report exceeded market expectations in the growth of new jobs while reflecting a deceleration in wage growth.
The Irrepressible Labor Market
Last week’s employment data showed that the labor market remains stout after over a year of sharp interest rate hikes. Job openings in April increased to more than 10 million, reversing three straight months of declines, while private sector employment increased by 278,000 jobs in May, according to a survey by Automated Data Processing (ADP), a significant payroll processor. In line with these strong numbers, the Department of Labor reported 339,000 new jobs were added in May. That came above the consensus estimate of 190,000 and marked the 29th consecutive month of positive growth.
This Week: Key Economic Data
Monday: Factory Orders. Institute of Supply Management (ISM) Services Index. 
Tuesday: Jobless Claims. 
This Week: Notable Companies Reporting Earnings
Tuesday: The J. M. Smucker Company (SJM)
Wednesday: Campbell Soup Company (CPB)
Thursday: DocuSign (DOCU)
Final Thoughts
The debt ceiling debacle is in the rear view mirror for now.  All I have to say is what a waste of time and resources.  We knew there would be a deal, but instead of just getting it done they spend 2 months posturing and scaring people along with the irresponsible media fanning the flames.  Well, remember this for next time. They aren't going to let the U.S. default.  Moving on.
The Fed decided to rattle the inflation saber last week and talked about raising rates more.  I believe this is just more posturing than anything.  They would be foolish to raise rates again.  Inflation is coming down.  Truflation measures inflation in real time with over 10 million data points.  They've been spot on all the way through and now show inflationjust below 3%.

There's no telling what the Fed is thinking.  Only time will tell and we have CPI on the 13th and Powell will discuss the Fed's most recent call on rates on the 14th.  

Stay tuned...