Fed Talks Tough • Debt Limit Countdown • Week Ahead

May 22, 2023 | Hoya Capital

Fed Talks Tough • Debt Limit Countdown • Week Ahead Daily Recap May 22 Written By Alex Pettee, CFA U.S. equity markets hovered around nine-month highs Monday ahead of a closely-watched debt ceiling this afternoon between President Biden and Speaker McCarthy, while benchmark interest rates climbed on hawkish Fed commentary. Hovering at its highest-levels since last August, the S&P 500 finished fractionally higher today while the Mid-Cap 400 and Small-Cap 600 each gained over 0.5%.

The Dow slipped 140 points. Real estate equities were upside leaders today, buoyed by signs of stability from regional lenders. The Equity REIT Index gained 0.6% today, while Mortgage REITs advanced 0.9%. Benchmark interest rates rose to their highest level since March today as Fed officials continue to talk tough on the need for further monetary tightening. St. Louis Fed President Bullard said that he believes that two more rate hikes are necessary this year.

Regional lender PacWest (PACW) - which has plunged 70% this year on concerns over the stability of its deposit base - rebounded nearly 20% today after it disclosed a deal to sell a $2.7 billion portfolio of 74 real estate construction loans to Kennedy Wilson Holdings (KW). Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets hovered around nine-month highs Monday ahead of a closely-watched debt ceiling negotiation this afternoon between President Biden and Speaker McCarthy while benchmark interest rates climbed for a sixth-straight session on another round of hawkish Fed commentary.

Holding near its highest levels since last August, the S&P 500 finished fractionally higher today while the Mid-Cap 400 and Small-Cap 600 each posted gains of over 0.5%. The Dow slipped 140 points. Real estate equities were upside leaders today, buoyed by signs of stability from regional lenders. The Equity REIT Index gained 0.6% today, with 15-of-18 property sectors in positive territory, while the Mortgage REIT Index advanced 0.9%. As discussed in our Weekly Outlook ...