Weekly Market Insights

May 12, 2023 Volume 10 Issue 19

Stocks closed the week on a mixed note as less than optimal economic news and continued anxiety surrounding the approaching debt ceiling “X-date” weighed on investor sentiment.

Weekly Highlights:

  • The cost of US goods and services increased again in April with the Consumer Price Index (CPI) climbing 0.4%, as expected. Food prices were unchanged for the month, while energy prices rose 0.6%. Core CPI, which excludes the cost of food and energy, rose 0.4%. Shelter prices, which account for nearly 44% of the core, also rose 0.4%. On a y/y basis, CPI eased to 4.9%, the smallest 12-month increase in two years, while core CPI moderated modestly to 5.5%.
  • Additionally, the Producer Price Index (PPI), which measures prices paid by wholesalers, rose 0.2% in April, below the consensus expectation of 0.3%. On a y/y basis, PPI slowed to 2.4%, the lowest rate since January 2021, and core PPI hit its lowest level since March 2021.
  • The University of Michigan’s consumer sentiment index’s preliminary reading for May fell to 57.7, a six-month low, as both the current and expected components dropped. More relevant than the headline number, however, is the long-run consumer inflation expectation that rose to 3.2%, a       twelve-year high, making it difficult to see a Fed rate cut soon.
  • US wholesale inventories were unchanged in March, slightly below the gain of 0.1% expected by economists. Inventories of durable goods were also flat, as gains in automotive and machinery were offset by declines in lumber and furniture, while nondurable goods inventories edged down 0.2%, pulled lower by paper, petroleum, and farm products. On a y/y basis, total inventories were 9.1% lower.
  • Initial claims for unemployment insurance rose by 22,000 last week to 264,000. This is the highest level since October 2021 and was significantly higher than the 245,000 estimate.   Additionally, continuing claims rose to 1.81 million.  While both readings are still historically low, the trend shows less tightness in the labor market.

The Week Ahead:

  • Economic releases will include current readings on housing starts and building permits, retail sales, industrial production, and April’s leading economic indicators.

Have a great weekend.

The data and commentary provided herein is for informational purposes only. No warranty is made with respect to any information provided. It is offered with the understanding that Hilltop Holdings Inc., PlainsCapital Corporation, Hilltop Securities and PlainsCapital Bank (collectively “PCB”) are not, hereby, rendering financial and/or investment advice, and use of the same does not create any relationship with PCB. This is neither an offer to sell nor a solicitation of an offer to buy any securities that may be described or referred to herein. PCB does not provide tax or legal advice. Please consult your own tax or legal advisor regarding your specific situation.  Whether any of the information contained herein applies to a specific situation depends on the facts of that particular situation. Investment and estate planning and management decisions may have significant financial consequences and should be made only after consulting with professionals qualified to offer legal, accounting and taxation advice. Neither this document nor any portion of its content’s supplements, amends or modifies any account agreement with PCB. Unless otherwise noted:

*All economic release data referenced from public sources believed to be accurate. *The source of data for all charts/graphs included in this presentation is Bloomberg LP. *Figures quoted represent monthly changes (m/m) and are seasonally adjusted.

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