President Joe Biden and House Majority Leader Kevin McCarthy have reached a deal to raise the US debt ceiling and avoid a default.[0] The agreement, which includes a two-year debt-limit increase, will be put to Congress for a vote on Wednesday.[0] Both Republican and Democratic support is needed for the bill to pass.[1] The deal was reached after weeks of negotiations and will keep non-defence discretionary spending about level with current levels over two years.[2] It will also impose new restrictions on certain government aid.[2] The agreement is not in favour of any one party and is aimed at benefiting the American people.[2] Treasury Secretary Janet Yellen has pushed back the earliest date of the debt default to 5 June, giving more time for the bill to pass.[3]
Despite the agreement, McCarthy left a Tuesday meeting telling Republicans that the two sides are nowhere near a deal.[4] The US runs the risk of default if an agreement is not reached within the next 10 days.[5] The bullish momentum in the stock market could be extinguished by the Federal Reserve, whose members are set to meet on 13-14 June to decide whether to continue hiking interest rates.[6]
In single-stock news, Marvell Technology surged more than 16% in pre-market trading after reporting Q1 net revenue above consensus and projecting fiscal 2024 artificial intelligence (AI) revenue to “at least double” from a year ago.[7] The Gap is up more than 10% after reporting an unexpected Q1 adjusted EPS profit.[7] Workday is up more than 8% after reporting Q1 subscription revenue above consensus and raising the lower end of its 2024 subscription revenue estimate.[7]
The Turkish lira fell to a fresh record low against the dollar after Turkey’s President Recep Tayyip Erdogan claimed victory in Sunday’s runoff presidential election, extending his term in office for another five years.[8] Erdogan has adopted a controversial policy of keeping interest rates low to tackle high inflation.[8] There was a 0.6% increase in the value of the dollar, which now stands at 20.09 lira.[8]
Brent crude experienced a 0.8% drop to $76.50 per barrel in the commodities market, while WTI crude decreased by 0.9% to $72.31 per barrel.[9] The price of gold dropped by 0.57% and is now valued at $1,963.20 per ounce.[10] Nike was the worst performer on the Dow Jones, falling 4% after an analyst downgraded the stock to a sell rating.[11] Shoe stocks have been coming under pressure following poor results from Foot Locker.[5] Shares of Micron Technology dropped as China accused the chipmaker of presenting a security risk, and Beijing banned it from being part of key infrastructure projects.[11]
0. “Hang Seng Index, ASX200, Nikkei 225: US Debt Ceiling Deal Delivers” FX Empire, 29 May. 2023, https://www.fxempire.com/forecasts/article/hang-seng-index-asx200-nikkei-225-us-debt-ceiling-deal-delivers-1350208
1. “Stock futures rise after GOP and White House reach tentative U.S. debt ceiling deal: Live updates” CNBC, 30 May. 2023, https://www.cnbc.com/2023/05/29/stock-market-today-live-updates.html
2. “Futures Rise On Debt Deal; Tesla, Nvidia In Focus” Investor’s Business Daily, 29 May. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-debt-ceiling-deal-ai-boom-lifts-market-rally
3. “Stock Market News Today, 5/29/23 – Futures Higher as the U.S. Debt Limit Deal Nears Completion” TipRanks, 29 May. 2023, https://www.tipranks.com/news/stock-market-news-today-5-29-23-futures-higher-as-u-s-debt-limit-deal-nears-completion
4. “Media Stocks, Broader Markets Dip On Debt Ceiling Jitters, And It Could Get Worse” Deadline, 23 May. 2023, https://deadline.com/2023/05/media-stocks-markets-debt-ceiling-default-risk-1235377482/
5. “Dow Jones Falls As McCarthy Urges Biden To Beat This Addiction; DraftKings Pops On Upgrade As Apple Dips” Investor’s Business Daily, 22 May. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-falls-as-kevin-mccarthy-urges-joe-biden-to-beat-debt-ceiling-addiction-draftkings-stock-soars-on-upgrade-apple-stock-falls-on-downgrade
6. “A Look At The SPY Heading Into The Week With Biden’s Tentative Debt Ceiling Deal In Focus – SPDR S&P 500” Benzinga, 29 May. 2023, https://www.benzinga.com/government/23/05/32615957/a-look-at-the-spy-heading-into-the-week-with-bidens-tentative-debt-ceiling-deal-in-focus
7. “Markets Today: Stocks Slightly Higher on Signs of Progress in Debt Ceiling Talks” Barchart, 26 May. 2023, https://www.barchart.com/story/news/17224166/markets-today-stocks-slightly-higher-on-signs-of-progress-in-debt-ceiling-talks
8. “Markets Mixed Ahead of Debt-Ceiling Vote” Barron’s, 29 May. 2023, https://www.barrons.com/articles/debt-deal-global-markets-stocks-754b47e0
9. “US Futures Rise, European Stocks Slip” Morningstar, 30 May. 2023, https://www.morningstar.com/news/dow-jones/202305301597/us-futures-rise-european-stocks-slip
10. “Stock market news today: Fed minutes show split on more rate hikes” Markets Insider, 24 May. 2023, https://markets.businessinsider.com/news/stocks/stock-market-news-fed-minutes-split-more-interest-rate-hikes-2023-5
11. “Markets End Mixed Ahead of Debt Ceiling Meeting” Investopedia, 22 May. 2023, https://www.investopedia.com/markets-end-mixed-ahead-of-debt-ceiling-meeting-7501395