Weekly Market Update for May 26, 2023, from DeWayne Hall: Debt Ceiling

We have very little to add to last week’s insightful and riveting commentary. But we love to provide our opinions whether requested or not, so here goes… 

This morning’s stocks are catching a bid, which means lawmakers, after a bunch of last minute meetings and side meetings and side, side meetings, are about to announce the debt ceiling has been raised. Wow, we didn’t see this coming. The old “last minute deal struck just before chaos and anarchy ensues” trick. Classic.

These guys had all year to get this debt ceiling (whatever those words actually mean) done. They knew there was some deadline hanging out there…June 1, then June 15, then sometime in mid-summer, then back toward early June. But we knew all along they wanted to milk this media circus silliness for all it was worth, and they’re going to pull it off once again.

So, get ready. In case you have a life and don’t care to watch, we’ll go ahead and fill you in on what is about to take place. It will be political theater at its finest.  These wonderful servants of the people, will soon be seen slowly walking down the steps of our nation’s Capital, arm in arm, heads back laughing deliriously at each other’s witty banter, as they march toward the bank of cameras and microphones, their only true friends. Then, hustling to their assigned marks at the podium, just behind the lead dog, as if on cue, each will take their turn in front of the microphones to triumphantly announce that today will be looked back on as one of the historic days in the history of our great nation; and that it’s only fitting that on the weekend we honor those who have served our country, they (your humble servants) have (in the 11th hour) when all seemed lost, have brought America back from the precipice, and reached across the aisle to their esteemed colleagues to sign a monumental agreement to raise the debt ceiling for the American people.  

There will be thundering applause from their staff, assigned to clap like seals at the three rehearsed times. None of these men and women will have actually read what they signed, much less understood if they did. But they will pull out the ‘big gun’ words and catchphrases saved for only the big occasions, and, with moist, almost tearful eyes that convey both joy and exhaustion, they will answer the same questions from the same puppet reporters the exact same way they’ve been told by their public relations firm to answer it for years. It almost makes us nauseous just thinking about it. 

Then, just when they feel we’ve had about enough of their BS for one day, they will turn, and together, slowly ascend the steps of the capital, turning around every twelve steps to wave at some ghost, and point at some object out in the far distance.

It’s going to be epic.  

But we digress.

Back to the market. It’s being propped up by a handful of names, and the huge majority of stocks are neutral to leaning weak. Though there may be some potential for further upside, we’re afraid this latest move is starting to run on fumes, and that downside risk far outweighs any further upside potential. 

Debt ceiling aside, we feel the 5%+ currently being earned on money market funds (the highest level in 20 years, by the way) is an excellent alternative to chopping around in equities and the downside risk it can expose you to. A guaranteed 5% bird in the hand looks much better to us right now than the two hiding in the bush. We know we’ve been singing this same old song for some time now, but trust us, sometimes the oldies are the goodies.

We wish you all a wonderful holiday weekend as we honor and thank those who serve and have served our nation. 

The views expressed represent the opinion of Good Life Asset Strategies, LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.