Weekly Macro Minute

GuideStone Reflections

If anyone comes to you and does not bring this teaching, do not receive him into your home, and do not greet him; for the one who greets him shares in his evil works.

2 John 10-11, CSB

In the first century, Christianity was growing miraculously and gloriously, but it was fragile during those early years. The Apostles were the chief source of authority and teaching, but there were no schools, few books, and very little organization. The spread of the Gospel was reliant on hospitality networks. As the Apostles and their students made the circuit, home churches would take care of them and eventually send them further along to teach others. In an open system like this, it was very easy for false teachers to “get on the circuit” and spread their heresy.

John wrote his letters to congregations facing the temptation to be drawn away from the truth of the faith by false teachers. But notice John’s directive in these verses. He did not warn against accepting or sharing with non-Christians. Rather, he warned against offering hospitality to any traveler who professed to be a Christian teacher but deliberately sought to undermine the apostolic message. Christians were not obligated to share their resources with them. They weren’t even supposed to greet them lest they give the impression of supporting their heretical ministry.

Anti-Christian teachers no longer work the hospitality circuit to get their message out. But they don’t have to. We greet and offer hospitality to false teachers every day by inviting them into our homes through our ubiquitous media. An endless array of books, movies, videos, music, informational programs, and entertainment promoting an anti-biblical worldview is a swipe or tap away. As Christians, we must understand the message (and the messenger) underlying the media we consume. And it may even be worth our while to unplug or unsubscribe, lest we be seen supporting their “ministry.”

Across the Markets

Stocks continued their general ascent for the week, with the S&P 500^® breaching intraday the closely watched 4,200 level for the first time since August. The persistency of the rangebound pattern of the S&P 500^® is noteworthy, as last week marked the sixth consecutive week of returns landing within +/- 1% (the longest such stretch since November 2019). Furthermore, the Index leadership remains incredibly narrow, as the equal-weighted S&P 500^® is up a relatively benign 0.93% year-to-date, a whopping 8.25% behind the broad Index's return due to mega-cap technology stocks continuing on an upward tear. Volatility in regional banks continued as an ETF tracking the broad group logged its best daily gain since early 2021.

The debt ceiling debate dominated headlines throughout the week. Both sides of the aisle generally said the right things (i.e., a solution is imminent). Still, the political jousting seemed to persist at various points as the week ended with the Republicans stating that they had decided to “press pause” on negotiations. The date at which a default would occur is around early June, so a deal must be hammered out soon, lest markets react violently to the downside of a no-deal outcome.

The U.S. 2- and 10-year Treasury yields steadily climbed throughout the week to end at 4.27% and 3.71%, respectively (the highest levels since early March). WTI oil was flat on the week, ending at just under $72/bbl.

European shares were generally higher as optimism that interest rates could be close to a peak level garnered optimistic trading. Underlying weakness in Europe persists as worrying inflation levels are juxtaposed against an increasingly weak consumer. Japan continues to be a global bright spot as it logged its sixth consecutive week of gains (both major indices reached 33-year highs during the week). The Japanese markets have been broadly supported by stronger economic data (driven by strong consumption) and commensurate buying of Japanese equities by overseas investors. China's markets were mixed as the “reopening trade” is losing steam as economic data points to weaker outcomes.

In the Economy

Retail sales rose 0.4% in April, below expectations, and at the slowest pre-pandemic year-over-year pace of 1.6%. This nominal metric is even weaker when considering this data point on a real (net of inflation) basis over the same year-over-year time frame, where inflation clocked in at 5.5%. The week also brought a jobless claims number of 242,000 (below expectations and the prior week's reading of 264,000). Additionally, continuing claims hit their lowest level in nine weeks. In sum, the employment situation remains surprisingly resilient.

On the Fed front, various Fed members espoused support for another rate hike during the week, pushing up yields and odds of another increase. Fed Chair Powell also provided some hawkish commentary on Friday, stressing again that inflation remains much too high but emphasizing that the rate-setting body would remain incrementally focused on each data point in determining the path of future rate levels versus vocalizing specific support for another imminent hike. As of Monday, we have 23 days until the FOMC meets again, and investors are currently baking in a 17% chance for a 25-basis point rate hike.