Weekly Market & Economic News Recap (Week of August 14, 2023)

• Shoppers boost retail sales for fourth straight month. Consumers spent more in July on food, clothing and online. (Wall Street Journal, August 15, 2023, https://www.wsj.com/articles/shoppers-boost-retail-sales-for-fourth-straight-month-264d20ef?mod=series_inflation)

• Stocks, government bonds drop after hot retail sales data. Major indexes have fallen in August from recent highs. (Wall Street Journal, August 15, 2023, https://www.wsj.com/articles/stocks-government-bonds-drop-after-hot-retail-sales-data-80ffee5c?mod=Searchresults_pos6&page=1)

• Some Fed officials are turning cautious about raising rates too high. Central bank officials face a puzzle as inflation slows, but economic activity is firmer than anticipated. (Wall Street Journal, August 16, 2023, https://www.wsj.com/economy/central-banking/some-fed-officials-are-turning-cautious-about-raising-rates-too-high-5b998ef6?mod=economy_lead_pos4)

• Loan defaults outpace junk bonds as interest-rate pain hits. Floating-rate loans are vulnerable to rising interest rates. Delinquencies remain lower among borrowers of high-yield bonds. (Bloomberg, August 16, 2023, https://www.bloomberg.com/news/articles/2023-08-16/loan-defaults-outpace-junk-bonds-as-interest-rate-pain-hits?srnd=null)

• Treasury yields hit new highs. S&P 500 falls a third day, extending an August stock slide. (Wall Street Journal, August 17, 2023, https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-08-17-2023-f51b72d9?mod=Searchresults_pos2&page=1)

• Mortgage rates hit 7.09%, highest in more than 20 years. Interest rates hit housing hard: Would-be buyers are locked out, and would-be sellers are staying put. (Wall Street Journal, August 17, 2023, https://www.wsj.com/economy/housing/mortgage-rates-2023-us-higher-seven-percent-c92d684a)

• Stocks finish lower for the week, deepening their August slump. U.S. government bond yields slipped slightly on Friday but were still high. (Wall Street Journal, August 18, 2023, https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-08-18-2023-bb39420a?mod=Searchresults_pos4&page=1)

• Economists lift US growth forecasts, see Fed higher for longer. Forecasters surveyed see stronger economy through end of 2024. That strength is seen delaying when the Fed will cut rates. (Bloomberg, August 18, 2023, https://www.bloomberg.com/news/articles/2023-08-18/economists-lift-us-growth-forecasts-see-fed-higher-for-longer)