Weekly Market Recap for May 15, 2023
The stock market had a positive week, with gains across major indices, marking the end of a six-week period where the S&P 500 had minimal fluctuations. The S&P 500 reached new highs during the week, both in terms of closing and intraday levels, but struggled to maintain a position above the 4,200 mark on a closing basis.
| INDEX | STARTED WEEK | ENDED WEEK | CHANGE | % CHANGE | YTD % |
| DJIA | 33300.60 | 33426.60 | 126.00 | 0.4 | 0.8 |
| Nasdaq | 12284.70 | 12657.90 | 373.20 | 3.0 | 20.9 |
| S&P 500 | 4124.08 | 4191.98 | 67.90 | 1.6 | 9.2 |
| Russell 2000 | 1740.85 | 1773.72 | 32.87 | 1.9 | 0.7 |
The strong performance of mega-cap stocks contributed to overall index gains, although there was broader participation from other stocks compared to previous weeks. The Vanguard Mega Cap Growth ETF (MGK) rose 2.9%, and the Invesco S&P 500 Equal Weight ETF (RSP) rose 1.0%. The market-cap weighted S&P 500 gained 1.7%.
Market participants faced mixed signals throughout the week. Optimism about a debt ceiling deal emerged after President Biden’s meeting with congressional leaders, but later reports suggested a pause in debt limit talks between the White House and House Republicans, creating uncertainty. Some Federal Reserve officials made hawkish comments, indicating that current data does not support a pause in rate hikes.
The bond market experienced a decline in safety premium, particularly in short-term Treasuries, as investors contemplated the possibility of a rate hike at the June FOMC meeting. The 2-year note yield rose by 29 basis points to 4.27%, and the 10-year note yield rose by 23 basis points to 3.69%.
The bond market also reacted to positive news about debt ceiling talks and strong price action in regional bank stocks. The SPDR S&P Regional Banking ETF (KRE) rose by 7.8% after Western Alliance (WAL) reported an increase in deposits. Earnings reports from key retailers such as Home Depot (HD), Walmart (WMT), Target (TGT), and Foot Locker (FL) had mixed reactions from the market.
Most sectors of the S&P 500 recorded gains for the week, with technology, consumer discretionary, communication services, and financials leading the way. However, the utilities sector experienced a significant decline, followed by real estate.
In summary, the stock market had a positive week with gains in major indices, driven by mega-cap stocks. Mixed signals regarding the debt ceiling and hawkish comments from Federal Reserve officials created some uncertainty. The bond market saw a decline in the safety premium, and the regional banking sector had a strong performance. Earnings reports from key retailers had varied outcomes.
Until next week, nore to come for sure!
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