S&P 500 (SPY) Report – 05/22/23
Good morning traders!
The S&P 500 ($SPY) is trading near Friday’s close. Let’s get into it…
Stock futures showed little change on Monday morning as traders monitor the ongoing negotiations over the U.S. debt ceiling to prevent a default. The ongoing debt ceiling talks in Washington are creating uncertainty and may go down to the wire. The situation raises questions about the potential impact on bond yields, stock markets, and the actions of the Federal Reserve. There is speculation about whether President Joe Biden could bypass the ceiling by issuing more bonds under the 14th Amendment. It’s understandable that some may feel inclined to take a highly risk-averse approach, even considering the option of keeping money at home. However, this strategy goes against the general advice of staying invested in the market to benefit from potential rallies if the debt ceiling issue is resolved.
Beyond the debt ceiling, the overall outlook doesn’t appear promising. Recent company earnings suggest a flat earnings outlook for the rest of the year, with the potential for earnings to be affected by aggressive Federal Reserve rate hikes. The possibility of a recession is still a topic of discussion, even though its onset has been repeatedly postponed. Additional insights may emerge from reports by retailers such as Dollar Tree, Costco, and Lowe’s in the coming week.
Monday Economic Events:
No Economic Data Scheduled
Fed Speaker Scheduled:
James Bullard 8:30am ET
Tom Barkin 10:50am ET
Raphael Bostic 10:50am ET
Mary Daly 11:05am ET
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