Equity markets started the week on a hesitant note as President Joe Biden and Republican House Speaker Kevin McCarthy prepared to meet Monday in a bid to iron out road blocks in debt-ceiling negotiations.
(Bloomberg) — Equity markets started the week on a hesitant note as President Joe Biden and Republican House Speaker Kevin McCarthy prepared to meet Monday in a bid to iron out road blocks in debt-ceiling negotiations.
Talks have whipsawed between progress and deadlock for days, as time runs out to reach a deal. Stocks gave up gains on Friday after Republicans temporarily walked out. The urgency of the situation was underscored on Sunday by Treasury Secretary Janet Yellen, who said the chances are “quite low” that the US can pay all its bills by mid-June.
Futures on the S&P 500 and the Nasdaq 100 seesawed around flat on Monday. In Europe, Greek markets were a bright spot after Sunday’s national election resulted in victory for Prime Minister Kyriakos Mitsotakis, signaling that investment-friendly policies will continue.
“There is a lot of showmanship around the debt ceiling,” said Sarah Hewin, senior economist at Standard Chartered Plc in London. “Although it looks like there’s a been a breakdown, people believe talks will be quickly revived.
Micron Technology Inc. sank 5.8% in pre-market trading after China said the comapany’s products failed a cybersecurity review. Shares of other chipmakers, like Nvidia Corp. and Qualcomm Inc., also slipped.
Treasury bond yields ticked lower, led by rate-sensitive two-year notes and money markets trimmed their bets on a June interest-rate hike to just 25%. Federal Reserve Chair Jerome Powell and Minneapolis Fed chief Neel Kashkari, have both signaled in recent days that they would support a pause in rates.
Asian shares rallied as investors focused on Biden’s hints about improving relations with Beijing. His prediction that Sino-US ties would “begin to thaw very shortly” lifted Hong Kong stocks more than 1%.
In Greece, investors took the strong election support for market-friendly Mitsotakis as a cue that the nation is on track to reclaim an investment-grade rating, 13 years after its default.
The benchmark Athens Stock Exchange General Index jumped to its highest level in almost a decade. The premium investors demand to hold Greek 10-year debt compared with super-safe bonds of Germany, fell to the lowest in more than a year.
Greek Assets Surge as Vote Puts Nation on Path to Credit Upgrade
Key events this week:
- Eurozone consumer confidence, Monday
- Fed presidents speaking are James Bullard, Raphael Bostic and Thomas Barkin, Monday
- Eurozone S&P Global Eurozone Manufacturing & Services PMI, Tuesday
- US new home sales, Tuesday
- Dallas Fed President Lorie Logan speaks, Tuesday
- Fed issues minutes of May 2-3 policy meeting, Wednesday
- Bank of England Governor Andrew Bailey speaks, Wednesday
- US initial jobless claims, GDP, Thursday
- Interest rate decisions in Turkey, South Africa, Indonesia, South Korea, Thursday
- Tokyo CPI, Friday
- US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.2% as of 10 a.m. London time
- S&P 500 futures rose 0.2%
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average rose 0.1%
- The MSCI Asia Pacific Index rose 0.8%
- The MSCI Emerging Markets Index rose 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0810
- The Japanese yen rose 0.1% to 137.84 per dollar
- The offshore yuan fell 0.2% to 7.0395 per dollar
- The British pound was little changed at $1.2441
Cryptocurrencies
- Bitcoin was little changed at $26,830.76
- Ether rose 0.3% to $1,812.01
Bonds
- The yield on 10-year Treasuries declined two basis points to 3.65%
- Germany’s 10-year yield declined two basis points to 2.40%
- Britain’s 10-year yield declined three basis points to 3.97%
Commodities
- Brent crude rose 0.1% to $75.68 a barrel
- Spot gold rose 0.2% to $1,981.03 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Tassia Sipahutar and Richard Henderson.
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