Surveying the week of May 23-27, Jeff Mayberry and Samuel Lau (2:01) take note of improved investor sentiment in the form of a rally in stocks, allowing the S&P 500 to skirt the -20.00% definition of a bear market. The improvement in stocks was accompanied by lower bond yields. While bitcoin has typically behaved as a risk asset, the cryptocurrency was down about 1% on the week as of mid-Friday May 27 (8:38). Jeff Mayberry asks whether that move in bitcoin is contradicting the more optimistic message of the week’s rally in stocks, or whether bitcoin’s decline, muted compared to larger losses for other cryptocurrencies, suggests technical selling pressures are abating for the marquee cryptocurrency.
Turning to the week’s macro news, the cohosts zero in on the release of minutes of May 4 meeting the Federal Open Market Committee (FOMC) (10:34). The minutes took note of tightening financial conditions, Fed expectations of a rebound in GDP in the second quarter of the year and PCE price inflation on a path to near the Fed’s 2% inflation target in 2024. “They are being a little optimistic,” Samuel Lau says, “relative to what the market’s thinking in terms of the progression of PCE price inflation.” While the minutes couched the statement in what Jeff Mayberry describes as a “squishy” turn of rhetoric, the FOMC for the first time raised the possibility of the Fed’s selling Agency mortgage-backed securities.
For the week of May 30-June 3 (25:28), the hosts point to the March reading of S&P CoreLogic Case-Shiller 20-City Composite City Home Price Index on Monday; the beginning of quantitative tightening, the ISM manufacturing survey for May and JOLTS job opens report on Wednesday; and the ISM services and May labor market reports on Friday.
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