Wall Street appears in the red before the market this Wednesday, the S&P 500 giving up 0.3%, the Dow Jones also 0.3% and the Nasdaq 0.4%…
(Boursier.com) – Wall Street appears in the red before the market on Wednesday, the S&P 500 giving up 0.3%, the Dow Jones also 0.3% and the Nasdaq 0.4%. Caution prevails, before the House vote on the debt ceiling and while the Nasdaq has just recrossed 13,000 pts, boosted by stocks linked to artificial intelligence and GAFAM in general. On the Nymex, a barrel of WTI crude lost 0.8% to $68.9. The ounce of gold yields 0.2% to $1,974. The dollar index is still up 0.4% against a basket of benchmark currencies.
On the economic front, while waiting for the big meeting of the report on the situation of employment on Friday, the markets will follow today on Wall Street the Chicago PMI index for the month of May (3:45 p.m., consensus 46.8) , the JOLTS report on job openings for April (4 p.m., consensus 9.478 million according to FactSet), the State Street investor confidence index, as well as the Fed’s Beige Book (8 p.m.), summary of regional conditions. The Fed’s Susan Collins, Patrick Harker and Philip Jefferson also intervened during the day, as market expectations now point to another quarter-point rate hike on June 14, at the end of the next monetary meeting (67% chance of a range of 5.25 to 5.5% according to FedWatch, against 33% chance of a status quo).
Elsewhere in the world this morning, the Japanese industrial production and retail sales statistics for April disappointed, as did the Chinese CFLP PMI indicators (manufacturing index of 48.8 in May and non-manufacturing index of 54.5 , both below expectations).
The agreement between Joe Biden and Kevin McCarthy on the American debt ceiling must now cross the two houses of Congress, with the vote of the House of Representatives this evening. Legislation negotiated by President Biden and House Speaker Kevin McCarthy to lift the US debt ceiling, currently around $31.4 trillion, and secure further federal spending cuts, reached an important milestone last night in for presentation to the full House of Representatives for debate and vote on Wednesday. The House Rules Committee voted 7 to 6 to approve rules allowing full chamber debate. Two Republicans on the committee still stood up to their leadership by opposing the bill. The vote shows the need for Democrats to help push the measure through the House, which is controlled by Republicans 222 to 213. House passage would send the bill to the Senate. The measure must be approved by Congress by June 5, when the US Treasury Department could run out of funds.
If the US Treasury is unable to meet all of its payments, or if it is forced to prioritize payments, this could trigger economic chaos. Biden and McCarthy wanted to be reassuring about them, believing that they would get enough votes to pass the bill before the fateful date.
The nonpartisan budget official, the CBO (Congressional Budget Office), said Tuesday the legislation would cut spending from its current projections by $1.5 trillion over 10 years starting in 2024. The CBO also said the Legislation, if enacted, would reduce interest on the public debt by $188 billion. McCarthy called the draft deal “the most conservative we’ve ever had.” Still, some of the more conservative Republicans in the House who wanted much deeper spending cuts were unconvinced. The other unknown is how many Democrats McCarthy will need to win Wednesday’s vote on the move.
In corporate news on Wall Street, after disappointing accounts of HP Inc. And Hewlett-Packard Enterprise yesterday evening, Salesforce (after scholarship), CrowdStrike (after closing), Veeva, NetApp, Okta, chewy, Donaldson Company, PureStorage And Advance Auto Partstoday announce their latest US listed accounts, as do C3.aione of the current stars of the AI wave.