Stocks rallied last week, propelled by growing optimism over reaching a deal on raising the debt ceiling and avoiding a technical debt default by the U.S.
The Dow Jones Industrial Average edged 0.38% higher, while the Standard & Poor’s 500 gained 1.65%. The Nasdaq Composite index advanced 3.04% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 0.47%.1,2,3
Possible Debt Deal
After stumbling on weak April retail sales and a combination of disappointing earnings and weak guidance from a major retailer, stocks moved higher mid-week as the news on the debt negotiations turned more positive.
The prospect of an agreement helped to lift a cloud of uncertainty that had weighed on markets in recent weeks and sparked sufficient optimism to shake off comments by the Dallas Fed President, who indicated that economic data may not support a pause in rate hikes yet. Aiding the market’s upbeat mood was a positive update on deposit growth at a troubled regional bank.
Stocks surrendered some of the week’s gains on Friday following reports of an impasse on debt talks and comments by Fed Chair Powell.
Recent updates have suggested that the housing market may be staging a turnaround after a long period of contraction. Last week’s data contained some fresh evidence of revival and caution that any potential recovery may remain further out.
The first positive sign was an increase in home builder sentiment that put the National Association of Home Builders Housing Market Index’s confidence level at the midpoint for the first time since July 2022. An unexpected 2.2% rise in housing starts in April followed. These encouraging reports, however, were followed by a disappointing 3.4% decline in April existing home sales.4, 5, 6
This Week: Key Economic Data
Tuesday: Purchasing Managers’ Index (PMI) Composite. New Home Sales.
Wednesday: FOMC Minutes.
Thursday: Gross Domestic Product (GDP). Jobless Claims.
Friday: Consumer Sentiment. Personal Income and Outlays. Durable Goods Orders.
Source: Econoday, May 19, 2023
This Week: Companies Reporting Earnings
Monday: Zoom Video Communications, Inc. (ZM)
Tuesday: Lowe’s Companies, Inc. (LOW), Palo Alto Networks, Inc. (PANW), AutoZone, Inc. (AZO), Intuit, Inc. (INTU)
Wednesday: Nvidia Corporation (NVDA), Analog Devices, Inc. (ADI), Snowflake, Inc. (SNOW)
Thursday: Costco Corporation (COST), Marvell Technology, Inc. (MRVL), Workday, Inc. (WDAY)
Source: Zacks, May 19, 2023
Taking A Side Gig? Here’s How It May Affect Your Taxes
Taxpayers who work in the gig economy may benefit from having a better understanding of how their work affects their taxes.
People involved in the gig economy earn income as freelancers, independent workers, or employees. They use technology to provide goods or services, including renting out a home or spare bedroom and providing car rides.
Here are some things taxpayers should know about the gig economy and taxes:
Show Your Heart Some Love
Heart disease is the number one killer of men and women in the U.S. While age, genetics, and family history are risk factors related to heart disease, some lifestyle factors are associated with better heart health. But first, discuss any medical concerns with your healthcare provider before beginning any diet or fitness regimen. The following information is not a substitute for medical advice:
"The information contained above is illustrative, provided for educational and informational purposes only, does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor."
Footnotes and Sources
2. The Wall Street Journal, May 19, 2023
3. The Wall Street Journal, May 19, 2023
4. National Association of Home Builders, May 16, 2023.
5. Fox Business, May 17, 2023
6. The Wall Street Journal, May 18, 2023
7. IRS.gov, April 4, 2023
8. MedlinePlus.gov, 2023
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Weekly Market Insights: Despite Stall, Debt Deal Optimism Cheers Markets
May 22, 2023