Productive US debt ceiling talks but no deal yet

The major US equity indices were mixed Monday, with the Dow Jones closing 0.4% lower, while the S&P finished slightly in the green and the Nasdaq added 0.5% as investors awaited a breakthrough in the debt limit talks. Technology, real estate, and financials outperformed the market, while consumer staples, materials, and energy declined the most. Meantime, European shares were muted yesterday, with the Euro Stoxx 50 index experiencing a slight decline of 0.2%. 

Summary for 23.05.2023 

• Most Asian shares retreated this morning amid no signs that US lawmakers were close to raising the debt ceiling, with a rally in Japanese markets now running out of steam after reaching 33-year highs. Data on Tuesday showed that the country’s manufacturing sector unexpectedly grew in May, while growth in the services sector hit a record high, pointing to some resilience in the world’s third-largest economy.  
• European shares are poised for gains and US equity futures are up slightly amid encouraging signs on US debt-ceiling negotiations. 
• Oil prices strengthened on Tuesday, extending gains from the previous session amid an improving demand outlook and declining global supplies. According to its latest monthly report, the International Energy Agency projected that global oil demand will exceed supply by 2 million barrels per day in the second half of 2023.  
• President Joe Biden and House Speaker McCarthy remained without a deal on the debt limit Monday night after another round of talks. However, they called their discussions productive and vowed to keep negotiating to avert a catastrophic US default. “The tone tonight was better than any other time we have had discussions,” McCarty told reports as he emerged from his meeting with the president. Biden, in a statement on Monday night, agreed the session had been “productive.” 
• In the latest central bank commentary, St . Louis Fed President Bullard suggested the possibility of raising rates by another half-point this year, while Fed’s Kashkari described the decision to pause or hike rates in June as a close call. Markets have scaled back bets on interest rate cuts this year, with rates seen holding at around 4.7% by December. 
• Meta Platforms was yesterday hit with a record €1.2 billion privacy fine by the European Union for sending user information to the United States. Still, shares of the Facebook parent were up more than 1% during the regular trading session. 
• Pfizer shares rallied yesterday on reports a peer-reviewed study showed that an oral weight-loss drug showed similar and faster results than competitor Novo Nordisk’s Ozempic. Its shares rose 5.4%.