Macro Briefing: 16 May 2023

* Biden and McCarthy set to meet today for more debt-ceiling talks
* Atlanta Fed President Raphael Bostic downplays rate-cut odds in 2023
* US household debt reaches new high in first quarter
* US will buy 3 million barrels of oil to refill emergency reserve stockpile
* China industrial output, retail sales rise less than forecast in April
* German economic sentiment falls in May, first negative print since December
* Argentina lifts interest rate to 97% to fight inflation
* NY Fed Manufacturing Index fell sharply in May:

Equally weighting S&P 500 stocks has been a winning strategy for the past three decades-plus, writes Morningstar’s John Rekenthaler:
Since summer 1988, the equally weighted strategy has soared. As the next chart shows, a costless version of the equally weighted S&P 500 portfolio has thrashed the conventional index.
There are two possible reasons for the equally weighted portfolio’s improvement. One, the portfolio invests in smaller companies… Thus, if smaller companies have outgained their larger rivals over the past 25 years, the equally weighted portfolio should have benefited. The same principle applies to the performance of value stocks versus growth companies. Because ‘glamor stocks’ typically dominate the top positions of the conventional index, its portfolio tends to be more expensive, in aggregate, than the equally weighted index’s. The latter should therefore prosper when value stocks lead the way.