Weekly Newsletter

Portfolio Advisory Council, LLC presents:

May 22, 2023

THE WEEKLY ECONOMIC

UPDATE

THIS WEEK IN HISTORY

The Dow Jones Industrial Average (DJIA) was first introduced on May 26, 1896, but it was not the first of the Dow indexes.

Dow Jones & Company was formed in 1882 by Charles H. Dow, a journalist formerly of the Kiernan News Agency, and Edward Jones formerly of the Providence Star. The first Index was created in 1884 and was originally known as the Dow Jones Railroad Average; it consisted of 11 stocks, including the New York Central and Union Pacific, and two non-rails, Pacific Mail Steamship and Western Union.

The first calculation of the DJIA was comprised of stocks of twelve different companies in the industrial sector. The average started at 40.94 points. These companies were selected specifically to represent major areas of the U.S. economy following the recession in the late 1800s.

QUOTE OF THE WEEK

"Have money enough to see a decline through without becoming uneasy or over-burdened."

~ CHARLES H DOW,

Founder of Dow Jones & Company

Stocks rallied last week, propelled by growing optimism over reaching a deal on raising the debt ceiling and avoiding a technical debt default by the U.S.

The Dow Jones Industrial Average edged 0.38% higher, while the Standard & Poor’s 500 gained 1.65%. The Nasdaq Composite index advanced 3.04% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 0.47%.1,2,3

Possible Debt Deal

After stumbling on weak April retail sales and a combination of disappointing earnings and weak guidance from a major retailer, stocks moved higher mid-week as the news on the debt negotiations turned more positive.

The prospect of an agreement helped to lift a cloud of uncertainty that had weighed on markets in recent weeks and sparked sufficient optimism to shake off comments by the Dallas Fed President, who indicated that economic data may not support a pause in rate hikes yet. Aiding the market’s upbeat mood was a positive update on deposit growth at a troubled regional bank.

Stocks surrendered some of the week’s gains on Friday following reports of an impasse on debt talks and comments by Fed Chair Powell.

Housing Mixed

Recent updates have suggested that the housing market may be staging a turnaround after a long period of contraction. Last week’s data contained some fresh evidence of revival and caution that any potential recovery may remain further out.

The first positive sign was an increase in home builder sentiment that put the National Association of Home Builders Housing Market Index’s confidence level at the midpoint for the first time since July 2022. An unexpected 2.2% rise in housing starts in April followed. These encouraging reports, however, were followed by a disappointing 3.4% decline in April existing home sales.^{4, 5, 6}

This Week: Key Economic Data

Tuesday: Purchasing Managers’ Index (PMI) Composite. New Home Sales.

Wednesday: FOMC Minutes.

Thursday: Gross Domestic Product (GDP). Jobless Claims.

Friday: Consumer Sentiment. Personal Income and Outlays. Durable Goods Orders.

^{Source: Econoday, May 19, 2023}

^{The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: Zoom Video Communications, Inc. (ZM)

Tuesday: Lowe’s Companies, Inc. (LOW), Palo Alto Networks, Inc. (PANW), AutoZone, Inc. (AZO), Intuit, Inc. (INTU)

Wednesday: Nvidia Corporation (NVDA), Analog Devices, Inc. (ADI), Snowflake, Inc. (SNOW)

Thursday: Costco Corporation (COST), Marvell Technology, Inc. (MRVL), Workday, Inc. (WDAY)

^{Source: Zacks, May 19, 2023}

^{Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

WEEKLY RIDDLE

I nearly always lie on a surface and come in different shapes and sizes, often with curves. You can put me anywhere you like, yet there is only one proper place for me. What am I?

Last week’s riddle: Note this alphabetic progression: B, C, D, E, G. What letter should then follow as the sixth letter in this successive series? Answer: P, the next rhyming letter in the sequence.

Portfolio Advisory Council, LLC

A Registered Investment Advisory Since 1986

Investment advisory services offered through Portfolio Advisory Council, LLC, and an SEC Registered Investment Adviser.

We cannot accept trade orders through e-mail. Important letters, e-mail, or fax messages should be confirmed by calling 713.574.6015. This email service may not be monitored every day, or after normal business hours.

James W. Hamilton, CFS, AIF

713.574.6025

W. Thomas Sutton CFP(R), ChFC, CLU

713.574.6020

Philip B. Moran, MBA, ChFC, CFP(R), AIF

713.574.6030

John C. Husbands

Visit us at www.pac1000.com

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

CITATIONS:

^{1. The Wall Street Journal, May 19, 2023}

^{2. The Wall Street Journal, May 19, 2023}

^{3. The Wall Street Journal, May 19, 2023}

^{4. National Association of Home Builders, May 16, 2023.}

^{5. Fox Business, May 17, 2023}

^{6. The Wall Street Journal, May 18, 2023}

^{7. IRS.gov, April 4, 2023}

^{8. MedlinePlus.gov, 2023}