The Daily Money: The markets woke up on the wrong side of a three-day weekend. Here's why.
It's Medora Lee, and I don't know about you, but I am suffering a three-day weekend hangover. What day is it again? Right, Tuesday.
Looks like I'm not the only one in a haze. All major U.S. stock indexes are lower this morning, unable to extend a recent rally to their 2023 peaks. Investors appear worried about China's weak economy hurting global growth. China is the world's second-largest economy, behind the U.S.
Domestically, we have the opposite worry: Our economy is still way too hot to contain inflation. Housing starts surged 21.7% in May on a seasonally adjusted annual basis for the strongest rise since October 2016 and the eighth largest monthly gain since at least 1959, Wells Fargo economists said. Further, there are more homes coming. Builder permits jumped 18.5% to the highest level in 11 months. This sounds great for renters and home buyers, but for the Federal Reserve and borrowers? Not so much.
"If Fed rate hikes can’t bring down the most interest rate-sensitive sector of the economy, then maybe interest rates are still not high enough," said Chris Rupkey, chief economist at market research firm FWDBONDS LLC.
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Each weekday, The Daily Money delivers the best consumer news from Paste BN. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.