As markets assess the past week and look ahead to the next, Wall Street looks to the uncertainty around Washington’s debt ceiling stalemate and growing fears of a looming recession. . Meetings between President Joe Biden and congressional leaders from both parties, which were scheduled to take place on Friday, are scheduled for earlier this week. At issue is a deal to raise the country’s borrowing limit, which must be reached by June to avoid a historic U.S. debt default. Republicans, led by House Speaker Kevin McCarthy, want to include spending cuts in the deal to raise the debt ceiling. Biden and Democrats are willing to discuss spending cuts, but only outside of the debt ceiling debate. Raising the debt ceiling would allow the government to pay for spending already incurred. With both on the brink of default, Jim Cramer said last week that such rhetoric is so damaging it could trigger a recession. He added that now is “not a good time” for the market and worries about a repeat of 2011. The debt ceiling was raised at the last minute that year, but a bitter row over the summer sent the S&P 500 index down 17% from late July to mid-August. That summer, Standard & Poor’s took an unprecedented step, downgrading the US’ AAA credit rating. Markets stumbled last week on fears of bankruptcy as the debt ceiling deadline loomed. The Dow Jones Industrial Average and the S&P 500 ended Friday lower for a second straight week of losses. The Nasdaq ended lower on Friday but rose for the third consecutive week. While fears of a recession persist, the potential for a soft landing remains real. The US Federal Reserve (Fed) is expected to suspend a series of interest rate hikes in June to combat inflation. The central bank last week raised interest rates for the 10th time in more than a year. According to the CME FedWatch tool, the market is above his 30% chance of a rate cut at his July meeting of the Fed. We believe it is still too early to start considering cuts, but economic indicators will be the final deciding factor. Still, it’s time to pause rate hikes. Economic growth is already constrained by the tightening cycle. Last week saw further signs of easing price pressures. In addition to what central bankers have done so far, the tightening of credit conditions due to the recent bankruptcies of local banks and the debt ceiling crisis is hurting monetary policy itself. Any further rate hikes would be excessive. As of Friday’s settlement, the US Dollar Index was around $102, its best weekly performance since February. Gold closed just under $2,020 an ounce. West Texas Intermediate Crude Oil fell 1.8% for the week, marking its fourth straight week of negative growth. The 10-year US Treasury yield ended the week near 3.46%. Off-price retailer TJX Companies (TJX), which operates TJ Maxx, Marshalls and HomeGoods among its portfolios, will report quarterly results before the opening bell on Wednesday, an important week for retailers. The Foot Locker, Fla., reported before the bell on Friday. Here are some of the other notable companies that will be releasing notable performance and economic data over the coming week. Monday, May 15 Before Bell: Azul (AZUL), Tower Semiconductor (TSEM), Costamare (CMRE) After Bell: New Holdings (NU), XP (XP), Fortuna Silvermines (FSM) Tuesday, May 16 Before Bell Bell: Home Depot (HD), Baidu (BIDU), Tencent Music Entertainment Group (TME) 8:30 a.m. ET: Retail Sales (April) 9:15 a.m. ET: Industrial Production and Equipment Operations Rates (April) 10am ET: Business Stocks (March) 12:15pm ET: New York Fed President John Williams Wednesday, May 17 Before Bell: TJX Companies, Target (TGT) After Bell : Cisco Systems (CSCO), Synopsys (SNPS), Take-Two Interactive (TTWO) 10am ET: Home Starts and Building Permits (April) Thursday, May 18 Before Bell: Walmart (WMT), Alibaba (BABA) ), Dole (DOLE), Bath & Body Works (BBWI) Post-Bell: Filed Applications (AMAT), Ross Store (ROST) 8:30 a.m. ET: Weekly Unemployment Claims and Philadelphia Fed Index (May) 10am ET: Existing Home Sales (April) and Leading Indicators (April) Friday, May 19 Before The Bell: Foot Locker, Deere & Co. (DE) 8am 45 min ET: New York Fed President John Williams looks back on two clubs last week as investors tried to understand what two key reports on inflation containment meant for Fed rates. Holdings reported earnings. – Raising plan at meeting in June. We also made some deals. Shortly after Monday’s bell, the Company purchased an additional 40 shares of Caterpillar Inc. (CAT), increasing his Jim Cramer Charitable Trust ownership of CAT to 370 shares, increasing its weight in the portfolio from 2.68% to 2.99%. Increased. The company had allocated cash for the transaction on May 1, following the first quarter share price decline. On Tuesday afternoon, we took advantage of Footlocker’s recent weakness to increase small positions and improve our average cost base. Bought 300 more shares. The Trust now owns 1,000 FL shares, increasing its weighting in the portfolio from 1.03% to 1.47%. We’re on track for a recovery in performance for Foot Locker (which, as I said, will report earnings in the coming week) under CEO Mary Dillon’s multi-year “race-up” plan. looking for possibilities. As with any turnaround, we recognize that improvement will take time to materialize. But with an annual dividend yield of over 4%, our patience has paid off. Wynn Resorts (WYNN) reported far better-than-expected first-quarter results after Tuesday’s closing bell. The casino operator’s Las Vegas and Boston properties continued to perform well, with operations in Asia’s gaming hub Macau also participating. Management has reinstated a quarterly dividend of 25 cents per share. Wynn shares ended Friday lower for a fourth straight session. Probably because of profit taking. The stock is still up 28% year-to-date. Before Wednesday’s bell, April’s consumer price index (CPI) was better than feared, with year-on-year growth of 4.9%, falling below 5% for the first time in two years. Most notably, Shelter inflation, which has proven to be tenacious, has also slowed for the first time since February 2021. Disney (DIS) reported earnings for the second quarter of 2023 essentially on schedule after Wednesday’s bell, thanks to a strong theme park business. But missed subscriber numbers and moves related to management’s turnaround plan led to a drop in the stock on Thursday and a drop on Friday, capping out a tough week for Disney. Ahead of the release, we said this quarter would not be a breakthrough quarter for Disney, as CEO Bob Iger’s cost-cutting and restructuring plans will take time to reflect in financials. Before the bell on Thursday, April’s Producer Price Index (PPI) confirmed what the previous day’s CPI had shown. The PPI rose just 2.3% year-on-year to its lowest level since January 2021. (The Jim Cramer Charitable Trust is long-held in TJX, Florida, Wynn, DIS, CAT. For a complete list of shares, see here.) 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Traders gather on the floor of the New York Stock Exchange on May 11, 2023.
Source: New York Stock Exchange
As markets assess the past week and look ahead to the next, Wall Street looks to the uncertainty around Washington’s debt ceiling stalemate and growing fears of a looming recession. .
