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Week in Review: May 15.2023 - May 19.2023

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May 23, 2023

Market Recap


The S&P 500 index rose 1.6% this week as gains led by the technology, communication services and consumer discretionary sectors brought the market benchmark to a fresh 2023 high. The climb came amid encouraging guidance from some companies and hopes that Congress will reach an agreement on the US debt ceiling soon, though those hopes dimmed a bit on Friday after Republican negotiators halted the talks, saying the White House was being uncooperative.

The S&P 500 ended Friday's session at 4,191.98, up from last Friday's closing level of 4,124.08. It is now up 0.5% for the month to date and up 9.2% for the year to date. The S&P 500 reached an intraday high of 4,212.91, its highest level this year. Still, the index ended Friday's session down 0.1% as worries about the debt ceiling resumed due to the pause in negotiations.

Investors had been more optimistic on Thursday after House Speaker Kevin McCarthy said a House of Representatives vote on a debt ceiling deal could come as soon as next week. The debt ceiling remains a concern as Treasury Secretary Janet Yellen warned that without a deal to raise the borrowing limit, the US government may be unable to pay its bills on time by June 1.

By sector, technology had the largest percentage increase of the week, up 4.2%, followed by a 3.1% rise in communication services and a 2.6% boost in consumer discretionary. Other gainers included financials, industrials, energy and materials.

The utilities sector led to the downside with a 4.4% drop, followed by a 2.4% decline in real estate, a 1.7% slip in consumer staples and a 0.7% drop in health care.

Gainers in technology included shares of Applied Materials (AMAT), which rose 9.4% from a week earlier as the company reported fiscal Q2 adjusted earnings per share as well as revenue above the year-earlier quarter and analysts' mean estimates. Applied Materials also forecast fiscal Q3 net sales above the Street view at the time the guidance was released.

In communication services, Take-Two Interactive Software (TTWO) shares added 9.7% as the video game publisher gave a robust long-term growth outlook in anticipation of key game releases, while it recorded fiscal fourth-quarter sales above market estimates. Morgan Stanley's analysts said the long-term outlook suggests "Grand Theft Auto VI" may be released in fiscal 2025.

Among the consumer discretionary sector's advancers, shares of Bath & Body Works (BBWI) climbed 12% as its fiscal Q1 adjusted earnings per share and net sales surpassed analysts' mean estimates. The retailer also raised its guidance for fiscal 2023 adjusted EPS.

The decliners in utilities included shares of AES Corp. (AES), which shed 5.9%. The company said it priced a $900 million offering of 5.45% senior notes due 2028.

Next week, Standard & Poor's will release its May readings on the US services and manufacturing sectors on Tuesday. Also, the first revision to Q1 gross domestic product is set to be announced on Thursday, along with April pending home sales. Finally, the April personal consumption expenditures index, a closely watched inflation measure, will be released on Friday.

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