My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.

I thought there would be only one thing that mattered this week—the debt ceiling. And that does matter. But this morning, the jobs report came in much hotter than expected, and that matters, too. So, this will be a longer post than I originally expected. 

After a mixed April, markets pulled back in May. The exception was the Nasdaq, which was up by just under 6 percent. Other U.S. markets were flat or down, and international markets declined. The primary headwinds were the debt ceiling debate (which may soon be solved) and signs that inflation is picking up again. Still, job growth beat expectations, and consumer and business confidence ticked up.

After a continued rally in April, markets largely pulled back in May. Exceptions here were the Nasdaq, which rose, and the S&P 500, which was essentially flat. The Dow, international markets, and bond markets were down by low single digits. The primary drivers for the decline were concerns surrounding the economy, politics, and—above all—the debt ceiling.

This week’s post is pretty much like last week’s post. In fact, I could quote it almost verbatim but won’t, because we do have some more information. 

The big news this week was the debt ceiling: who was talking, what they were saying, and if we will get a deal before the X date (i.e., when the Treasury runs out of money). When all was said and done, more was said than done and we ended the week pretty much where we started. But there was some good news.

Times are getting scary again. Between the debt ceiling, which is the crisis of the day, and everything else that is out there, people are starting to crack. With the Ukraine war still underway and with worries about China, inflation, and a recession, the debt ceiling looks like just the thing that could finally sink the ship. Even though we have done quite well so far and continue to, the worry is always that the next big thing will be the last straw.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

This week, there were two things that warranted comment. The first was the inflation reports, and the second was the debt ceiling. Let’s take a closer look. 

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.