10 Things You Need to Know: May 23, 2023
Key Data Points
Key data releases this week include: new home sales (Tue), FOMC meeting minutes (Wed), Q1 GDP revision (Thu), pending home sales (Thu), personal income and spending (Fri), PCE deflator (Fri), durable goods orders (Fri), and consumer sentiment (Fri).
May 16, 2023
Consumers resumed their spending ways in April following two months of pullback. Retail sales rose 0.4% (1.6% y/y) after declining 0.7% in March, revised from -1.0%. The April increase fell short of expectations for a 0.7% rise in the Action Economics Forecast Survey. Sales in the retail group, which excludes autos, building materials, gasoline & restaurants rose 0.7% (4.2% y/y) after falling 0.4% in March. Sales held steady in February but rose 1.7% in January.
May 18, 2023
Existing home sales in the US declined 3.4% month over month to a seasonally adjusted annual rate of 4.28 million in April, the lowest in three months, and compared to forecasts of 4.3 million. Total housing inventory increased 7.2% from March to 1.04 million units, which represents a 2.9-month supply at the current sales pace, up from 2.6 months in March.
May 19, 2023
The Conference Board’s Composite Leading Economic Indicators Index fell 0.6% (-8.0% y/y) in April, off for the 13th consecutive month. A 0.5% decline had been expected in the Action Economics Forecast Survey. Six of the Leading Index’s ten components contributed negatively to the index.
May 22, 2023
Today’s five biggest stocks—Apple, Microsoft, Alphabet, Amazon.com, and Nvidia —have a combined market cap of about $8.7 trillion, almost 25% of the S&P 500 cap and about 3.2 times the $2.7 trillion Russell cap. Those top five stocks have returned an average of 50% in 2023, accounting for roughly 80% of the S&P 500’s 8% gain. The median stock in the index has gained less than 2%, and less than half are trading above their 200-day moving averages. It’s a lousy rally.
May 22, 2023
Skanda Amarnath, executive director at Employ America and a former analyst with the New York Fed, notes that growth in multifamily residential units under construction and resilience in mortgage demand both are helping to paint an “encouraging picture” for the housing market. Buoyancy in housing and manufacturing isn’t “a typical thing you see right before a recession,” he said.
May 20, 2023
Recent Fedspeak suggests growing discord in the FOMC over next steps. Fed Chair Jerome Powell signaled he’s comfortable with a wait-and-see approach, while Dallas Fed President Lorie Logan, Cleveland Fed President Loretta Mester, and St. Louis Fed President James Bullard suggested the FOMC should hike again at the June meeting. By Friday, markets had priced in fewer rate cuts than they had a week earlier.
May 21, 2023
Treasury Secretary Janet Yellen said on Sunday that it is unlikely the US will be able to continue paying its obligations through June 15. “Well, there’s always uncertainty about tax receipts and spending,” Yellen said. “And so, it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15 while being able to pay all of our bills is quite low.”
Household debt rose 0.9% in the first quarter to reach a new high of $17.05 trillion, according to the Federal Reserve Bank of New York. Most debt categories saw increases, and credit card debt held steady at $986 billion.
May 19, 2023
A Gallup survey shows 26% of Americans see gold as the wisest long-term investment, a strong rise from last year’s 15%, while those who stated a preference for stocks fell to 18% from 25%. Technical analyst Ryan Detrick, of Carson Wealth, comments: “One reason to expect higher equity prices [is] that the masses keep betting on lower prices. This matters as the crowd is rarely right looking back at history.”