Early indications were for US stock futures to fall slightly on Monday. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indices rose 0.20% and 0.22% respectively on Monday morning, while Hong Kong-listed Chinese stocks supported the Hang Seng index (+1.29 %).
During the G7 summit in Japan, US President Joe Biden said he expects to improve relations between the United States and China in the short term and that the G7 has decided to take a unified approach towards Beijing.
The stock market fell on Friday: The Dow Jones Industrial Average posted a loss of 109.28 points, corresponding to a drop of 0.33%, to close at 33,426.63 points. The S&P 500 index also slightly declined, falling by 0.14% to 4,191.98 points. The Nasdaq Composite was down 0.24% to close at 12,657.90 points.
These changes were caused by concerns about rising inflation and the Federal Reserve possibly raising interest rates. It was a wonderful week for investors, with all three major stock indexes rising. The S&P 500 rose 1.65%, while the Nasdaq Composite gained 3.04%. This was the best week in March for investors and points to good overall stock market health.
During this week, worries about regional banks eased and it appeared that the White House and congressional leaders were moving closer to a debt ceiling deal. However, Barclays stressed the importance of considering that the market can be unpredictable. Uncertainties remain regarding the US debt ceiling.
According to Interactive Broker Jose Torres, the latest developments in the negotiations have created a problematic situation for investors. With so much at stake, investors closely monitor the status to assess the potential market impact. With the deadline looming, both sides must reach an agreement as soon as possible. Otherwise, the consequences could be dire.
On Friday, Republican Rep. Garret Graves walked out of the talks, raising uncertainty about the outcome of the negotiations. With the debt ceiling expiring looming, time is running out to find a deal—the potential consequences of failing to raise the debt ceiling range from government shutdowns to catastrophic economic collapse.
As the stakes get higher, tensions are felt on both sides. The situation remains fluid and it is not clear what the following developments will be. Currently, debt ceiling negotiations are at the center of economic discussions, and investors are closely monitoring the market to overcome the uncertainties of the current economic scenario. Despite the recent decline, many maintain an optimistic outlook on the stock market’s future and expect changes in the coming weeks.
On Friday, Powell announced that raising interest rates as previously expected may not be necessary to mitigate inflation, citing market tensions as one reason. However, Powell stressed, the committee still assesses how much policy tightening is needed to bring inflation up to the Fed’s 2 percent target.
A busy economic agenda is expected for the US this week, focusing on inflation data expressed in the PCE price index, which is likely the most significant event. Despite the considerable number of speeches by the Federal Reserve in the past and next week, the FOMC minutes are not expected to deliver any significant surprises.
Earnings season kicks off on Monday, with several US companies reporting their earnings over the next week. Notable names include Zoom video on Monday and Nvidia on Wednesday, both with expected post-market earnings releases.
Price lists for Friday 19 May 2023
DOW Jones -0.33% to 33,426.63
S&P 500 -0.14% to 4,191.98
NASDAQ 100 -0.24% to 12,657.90
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