(New York) The New York Stock Exchange did not know which foot to dance on Monday, the indices being divided, before a resumption of negotiations on the American debt between President Joe Biden and the leader of the Republicans in the House, Kevin McCarthy.
The Dow Jones Index was down 0.37%, the NASDAQ was up 0.43% while the S
Despite the uncertainties in Washington and the breakdown of talks on Friday, the indices had managed to conclude a positive week. The NASDAQ ended with a weekly gain of 3.04%, the S
The Democratic president and the opposition leader spoke on the phone on Sunday and agreed to resume discussions during the day on Monday.
It is a question of avoiding at all costs a dangerous and unprecedented default of payment for the United States which, if they cannot continue to borrow, risk from June 1st to miss repaying maturities.
Ten days before the fateful date, the threat is therefore becoming more and more real and is beginning to worry investors, even if this is not yet reflected in a pronounced way on shares.
The index to watch is the VIX, which measures market volatility, and so far it remained modestly up at 17 points.
But anxious musings are rife, like a JPMorgan analyst note titled “Ahead of the Fiscal Rubicon”: “We remain cautiously optimistic that talks between President Biden and Speaker McCarthy will lead to at least a partial agreement to raise the debt ceiling.”
“A complicated political environment, coupled with an earlier-than-expected deadline […] and optimistic stock positioning suggest a high risk of a significant revaluation of stocks if the X date is passed,” also worry these analysts.
For Patrick O’Hare of Briefing, “the market is certainly very attentive to the situation but it does not appear outrageously worried”. “That could change as we get closer to June, without a deal,” he added.
The bond market remained cautious, with rates on Treasuries remaining close to their close on Friday: at 3.68% for those at ten years. Gold, the safe haven par excellence, remained stable.
The Fed’s monetary intentions were also at the center of the week’s concerns as new data on inflation and consumption will be available on Friday (the PCE index for April). A revision to first-quarter GDP growth is also expected on Thursday.
On the stock exchange, Meta gained 2.49% despite a record fine of 1.2 billion euros from the Irish regulator imposed on Facebook for breaching European data protection rules (GDPR).
Semiconductor maker Micron Technology fell 3.71% as China accuses the US group of failing security and calls on companies to stop buying its chips.
Regional bank PacWest, heckled for weeks by brokers looking for the next weak link in the banking crisis, climbed more than 9% after announcing the sale of a portfolio of real estate loans totaling 2.6 billion dollars in an operation intended to strengthen its liquidities.
The oil group Chevron lost 1.69% after announcing the acquisition for 6.3 billion dollars of a producer of crude and natural gas in Colorado and Texas.
The distribution sector was the red lantern as several results are expected this week. Dollar General lost 1.23%, Target -1.60%, Walmart 0.62%.