Day Traders Diary

5/15/23

The major averages quietly moved higher as traders assessed the ongoing debt ceiling negotiations that are about to commence once again. The Dow Jones Industrial Average gained 22 points. The tech-heavy Nasdaq Composite outperformed, rising 80 points or 0.55%. The S&P 500 rose 12 points or 0.3%.

Treasury Secretary Janet Yellen told CNBC last week that failure to hatch an agreement on the debt ceiling would "produce financial chaos," with the Treasury currently giving June 1 as the date when it could fail to meet its obligations.

However, Yellen further hinted over the weekend that the U.S. would avoid a default.

On Monday, investors digested the May data for Empire State Manufacturing survey, which showed a collapse in manufacturing activity in New York. The survey fell 43 points from April to a reading of -31.8, below the Dow Jones estimate of -5.

Elsewhere, corporate earnings season is drawing to a close, but some major retail reports this week will give investors further insight into the state of the consumer. Home Depot

 reports Tuesday. Target and Walmart are set to report Wednesday and Thursday, respectively.

U.S. equity funds lost about $5 billion in April, marking a sixth consecutive month of outflows, according to Morningstar's monthly fund flow report.

In particular, large value funds saw the sharpest inflows last month, losing $6.9 billion. "Momentum for these funds might be waning as growth stocks have rebounded in 2023," said Adam Sabban, senior manager research analyst, equity strategies at Morningstar.

But investors still had an appetite for risk, as they plowed $6.7 billion into high-yield bond funds. These funds tend to pick up flows as stocks rise and shed money as equities fall.