CIBC Private Wealth
May 29, 2023
Morning Market Brief
Economic data from various sources will likely drive financial market activity this week. Investors will focus particularly on the US as lawmakers seek to reach an agreement on the US debt ceiling. Failure to reach an agreement could put the US into default. In Canada, economic announcements will be relatively light in volume but high in importance.
- The US debt ceiling negotiations will likely drive market performance over the week. The Treasury Secretary indicated the department could run out of money by June 1, a day before social security payments are due. If an agreement isn’t reached, it could lead to a default, a downgrade in credit rating and weaken economic conditions.
- Canada’s economic growth for the first quarter of 2023 will be released on Wednesday. Economists estimate an annualized growth rate of 1.7% over the quarter, an increase from flat growth (0.0%) in the fourth quarter of 2022.
- On Thursday, S&P Global will announce Canada’s manufacturing sector over the month of May. Canada’s manufacturing sector expanded in April.
- There are some key announcements from other countries and regions worldwide. Details of China’s May manufacturing activity arrive on Wednesday, May’s inflation in Europe will be released on Thursday, and data on the US labour market will be announced on Friday.
- Earnings announcements continue. Notable earnings releases in Canada are CAE Inc. and Lululemon Athletica Inc. In the US, HP Inc., Nordstrom Inc. and Salesforce Inc. are among the notable announcements this week.
US equity markets will be closed today for Memorial Day. Financial markets could be volatile if the US debt ceiling negotiations linger over the week and investors consider what economic results mean for central bank actions. While uncertainty persists, holding strong companies that thrive in all market environments can help reduce volatility in your portfolio and set it up for robust returns over the long term.
Please contact me to discuss how your portfolio may be affected by these economic developments and announcements.