The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
BLOOMBERG
Stocks and commodities climbed as investors bet that US politicians will be able to negotiate a solution to the debt-ceiling standoff, with President Joe Biden voicing optimism that a deal could be reached.
S&P 500 futures climbed 0.4%, signalling a rebound from May 12 retreat. Other markets tilted risk-on, with copper advancing and mining shares leading gains among European stocks. South Africa’s rand rise on signs that a diplomatic row with the US is softening.
The US debt ceiling remains the biggest focus for investors this week and strategists are warning about market turmoil and economic disaster if politicians don’t agree to raise the government’s $31.4 trillion borrowing limit. Joe Biden, House Speaker Kevin McCarthy and other congressional leaders are planning to hold further talks on May 16.
“When you look from afar in Europe at American politics right now it is difficult to see how they get to common ground, but the alternative is so bad maybe it forces that ground to be found,†said Luke Hickmore, investment director at Abrdn. “The risks are still there for sure.â€
The showdown in Washington is just one of many risks keeping investors side-lined, from recession to cracks in the banking system to disappointed hopes for a turn to easier monetary policy. The S&P 500’s decline of 0.3% marked the sixth straight week without a 1% move — the longest stretch of inertia since late 2019. The Thai baht climbed as pro-democracy parties got the most votes in elections and Stoxx Europe 600 rose 0.3% in London and S&P 500 futures rose 0.5%. While Nasdaq 100 futures rose 0.5%, futures on the Dow Jones Industrial Average also climb 0.5%. The MSCI Asia Pacific Index rose 0.5% and the MSCI Emerging Markets Index also gains 0.4%.
The Bloomberg Dollar Spot Index was little changed and the euro rose 0.1% to $1.0860. While the Japanese yen fell 0.3% to 136.13 per dollar, the British pound rose 0.2% to $1.2481. Bitcoin rose 1.8% to $27,437.59 and ether also climbs 1.8% to $1,830.93. The yield on 10-year Treasuries advanced one basis point to 3.47% and Germany’s 10-year yield advanced two basis points to 2.29%.