Debt ceiling drama still to play out

Debt ceiling drama still to play out

Market Review from Realm Investment Management – week ending 19th May 2023

Stock-markets rose last week on positive corporate results and hopes that the US debt ceiling issue will be resolved over the next few days. In the longer-term there is also increasing optimism that the Fed will start cutting rates later in the year. The German DAX index was the stand-out performer last week, reaching an all-time-high.

Re the debt-ceiling countdown: a meeting on Friday night brought no agreement from negotiators but today (Monday) President Biden is due to meet Republican Kevin McCarthy in a further attempt to resolve the issue.

The big US data release last week was Retail Sales which rose by 0.4% in April. This was less than expected with +0.8% forecasted and followed two consecutive months of declines. The data overall most likely indicates a gradually slowing in consumption.

The UK inflation rate will be published on Wednesday with the Bank of England expecting/hoping to see the annual CPI rate fall sharply. Andrew Bailey, governor of the BoE said last week that further tightening of monetary policy may be needed if there is no moderation in inflationary pressure. The yield on the 10-year gilt rose above 4%.

UK Market Chart 19th May 2023

US Market Chart 19th May 2023

US Risk Barometer 19th May 2023

Europe Risk Barometer 19th May 2023

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Download Our Free Brochure