May 22, 2023


Weekly Investment Update: May 22, 2023


Key Events: Economic Goldilocks, but waning confidence 

The news cycle was dominated by debt ceiling negotiations, which appear on track to produce a bi-partisan agreement. Some other notable items this week:

  • The Dallas Fed President said that continued inflationary pressures may preclude the expected pause in rate hikes.
  • With 95% of companies reporting, earnings are down for the third quarter in a row but are down less than originally expected.

Market Review: Stocks gain amidst uncertainty

Stock returns were not held back by the lack of debt ceiling progress; The S&P 500 rose 1.7% with growth stocks leading the way. International stocks rose modestly.

Bonds lost money as yields rose towards their highest levels since the March onset of the banking crisis in reaction to hawkish Fed comments.  

Outlook: Uncertainty – volatility and opportunity   

Although history does not repeat itself, it is wise to be attentive to it. The below chart notes how assets fared during the tense 2011 debt ceiling crisis. Risk assets have not reacted negatively during 2023, and while strong stock returns have been driven by the largest names, smaller stocks have remained mostly in the green.

OneAscent portfolios continue to be diversified, including allocations that may hold their value if the crisis causes risky assets to sell off. This will allow us to be prepared to take advantage of volatility rather than be a victim of it.

Returns during 2011 debt ceiling crisis[1]

Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.