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%.
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