Weekly Market & Economic News Recap (Week of June 19, 2023)

• Money-market funds are placing less cash in a Federal Reserve borrowing program, a sign that efforts to replenish government coffers after the debt-ceiling fight haven’t disrupted markets. (Wall Street Journal, June 20, 2023, https://www.wsj.com/articles/wall-street-buys-more-t-bills-parks-less-at-fed-304cf41e?mod=markets_major_pos15)

• Jerome Powell says interest rates likely to rise further and the central bank didn’t raise interest rates last week as it wanted to slow down its historically rapid pace of increases, but stressed it would likely lift rates again in coming months. (Wall Street Journal, June 22, 2023, https://www.wsj.com/articles/jerome-powell-set-to-discuss-interest-rates-bank-policy-1c65faa0?mod=economy_more_pos4)

• U.S. existing-home prices posted their biggest year-over-year decline in more than 11 years last month as rising interest rates continued to weigh on the housing market. (Wall Street Journal, June 22, 2023, https://www.wsj.com/articles/higher-interest-rates-hit-home-prices-again-e6f57f55?mod=economy_more_pos1)

• The balance of power in the jobs market is slowly tilting back toward employers as companies become choosier with their hires and workers turn more cautious about quitting. (Bloomberg, June 23, 2023, https://www.bloomberg.com/news/articles/2023-06-23/us-workers-lose-power-in-the-job-market-that-s-good-news-for-the-fed?srnd=economics-v2)

• Banks hit by worst week since may as regulatory ‘waves’ loom. Two bank stock gauges each fell at least 5% this week. Results from Fed stress test are set to be released Wednesday. (Bloomberg, June 23, 2023, https://www.bloomberg.com/news/articles/2023-06-23/bank-stocks-eye-worst-week-since-may-as-regulatory-waves-loom?srnd=null)

• Stocks post losing week after signs of cooling economy. The declines snapped winning streaks for U.S. indexes. (Wall Street Journal, June 23, 2023, https://www.wsj.com/articles/global-stocks-markets-dow-news-06-23-2023-3b8ea2aa?mod=markets_lead_pos1)

• Bullish bets on high-yield corporate bonds are starting to unravel as interest rates look set to stay higher for longer. Investors are turning back to safer investment-grade notes instead, saying the debt of junk-rated companies has gotten too expensive after a recent rally — especially as earnings are likely to deteriorate in an economic slowdown. (Bloomberg, June 24, 2023, https://www.bloomberg.com/news/articles/2023-06-24/pricey-junk-bonds-are-seeing-a-sudden-vibe-shift-credit-weekly?srnd=economics-v2)

• Homebuilding set to boost us economy after two-year contraction. Fed model sees housing adding to GDP for first time since 2021. Higher rates remain a risk for the sector. (Bloomberg, June 24, 2023, https://www.bloomberg.com/news/articles/2023-06-24/homebuilding-set-to-boost-us-economy-after-two-year-contraction?srnd=economics-v2)