Debt ceiling talks are set to resume tomorrow, following a weekend when Biden administration officials expressed cautious optimism that a deal can be reached prior to the government failing on some of its obligations. Equity markets have opened higher after the first signs of progress since the debt ceiling debate started.
Equity and credit market investors will also be focused on possible signs of stabilization in the banking sector, where pockets of stress remain from depositor outflows. The SPDR S&P Regional Banking ETF posted its lowest weekly close since September 2020 and is down approximately 40% since the banking turmoil first emerged in early March.1
This week’s economic calendar is highlighted by retail sales data on Tuesday, as well as updated housing starts information on Wednesday and existing home sales data Thursday.2 Weaker numbers are likely to be welcomed by Federal Reserve officials hoping for more signs of cooling in the economy to justify a pause on rate hikes.
1Bloomberg Terminal; 5/15/2023
2MarketWatch – U.S. Economic Calendar; as of 5/15/2023
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