Charts to Chew On: A Market May Day.
Contextualizing monthly consumer sentiment and market momentum. Data as of May 31, 2023.
For those who are newer here, I publish monthly readouts on the state of the markets and the corresponding implications for the US consumer. Read on for more!
With Q1 earnings moving into the rearview mirror, pockets of the market rallied in May, despite some warning signs of a low tank. While the S&P closed the month virtually unchanged, the tech-heavy NASDAQ closed the month up an astounding 6% – an impressive outcome against an arguably precarious macro backdrop. While choppiness in joblessness claims and slightly softening consumer sentiment spooked some, resilient spending data and commentary from companies ranging from American Express to Dick’s Sporting Goods kept the bull bear debate intact, with the optimists among us even suggesting that the possibility of a soft landing might be back in play.
That said, the next couple of weeks have the potential to be transformational as the pivotal debt ceiling debate continues and the FOMC reconvenes for its June meeting. With the market now pricing in a 39% likelihood of a rate hike (with multiple percentage point swings by the hour), the path forward for consumers might not be as filled with enhanced affordability and economic accommodations as they’ve been hoping for. With housing prices (at least temporarily) finding a floor and inflation continuing to eek higher, there simply appears to be fewer and fewer places for financial refuge. But will markets even care?
For now, all headlines appear to be almost exclusively oriented towards the ongoing excitement surrounding all things AI. With 5 AI exposed stocks – Alphabet, Apple, Meta, Microsoft, and Nvidia – accounting for almost all of the S&P’s 9% year-to-date return, the debate among public and private investors surrounding whether incumbents themselves will eat up most of the enterprise value generated by the transformational tech shift occurring around us continues to heat up. Nonetheless, please enjoy the selection of data points below as you too begin to craft your summer portfolio plans…
Note: Data reflective of May 31, 2023. This does not constitute investment advice.
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