May Market Recap: Crisis Averted?

May Market Recap: Crisis Averted?

June 05, 2023

The month of May was yet another interesting month in financial markets. We had an incredible earnings surprise from a microchip maker as well as a potential resolution to the debt ceiling debate.

The former, which was discussed above, was the surprising earnings beat of NVIDIA which propelled the stock 25% in one trading session to new all-time highs. Nvidia is an American semiconductor developer based in Santa Clara, CA. The reason for the surprise earnings beat we believed to be the need for more powerful computer hardware as the global economy begins to incorporate Artificial Intelligence into the economy.

The latter was the news that President Biden had struck a tentative deal to raise the debt ceiling with House Speaker Kevin McCarthy.  The debate had been raging over the month which caused a general fear that the US Government may default on its debt. This caused general fear as the US Government bonds have long been considered an incredibly safe asset. While the bill has cleared the House of Representatives, it now heads to the Senate to vote on the proposal.

Finally, it appears we may have our first descent with the FOMC, as many Federal Reserve Committee members suggest that there may need to be a pause at the next FOMC meeting. This could become bigger news in June as this would be the first time in over a year that there has been disagreement from the FOMC voting members on the path forward.

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