Biden and McCarthy set to continue talks regarding the US debt ceiling | InterPrac

Biden and McCarthy set to continue talks regarding the US debt ceiling

Biden and McCarthy set to continue talks regarding the US debt ceiling


Stocks dipped Tuesday as Wall Street also turned its attention to a meeting between congressional leaders and President Joe Biden on the US debt ceiling.

On Monday, Treasury Secretary Janet Yellen reaffirmed that the US faced the possibility of default as early as June 1, the so-called X date, if a deal isn’t reached between the White House and Congress. On Tuesday, she doubled down on her warning to raise the limit immediately.

Biden maintained a more optimistic view of the ongoing negotiations over the weekend, while House Speaker Kevin McCarthy said significant obstacles still remain. Biden has so far maintained that raising the debt ceiling is non-negotiable. McCarthy, however, has pushed for talks to broker a deal in which raising the debt limit would be tied to spending cuts.

On Tuesday, the White House said Biden will cut his upcoming international trip short as he deals with debt ceiling negotiations.

The Dow Jones Industrial Average closed below its 50-day average for the first time since March 30. The 30-stock index dropped 336.46 points, or 1.01 per cent, to 33,012.14. The S&P 500 fell 0.64 per cent to 4,109.90. The Nasdaq Composite declined 0.18 per cent to 12,343.05.

Dow member Home Depot pulled back by 2.15 per cent after the retailer reported disappointing quarterly revenue and cut its full-year guidance, as consumers postponed large home improvement projects.

According to the Commerce Department's report on Tuesday, retail sales, which gauge spending at stores, online platforms, and restaurants, increased by 0.4 per cent on a seasonally adjusted basis in the previous month. This growth follows declines in February and March. However, that was lower than the 0.8 per cent increase anticipated by economists polled by Dow Jones.

In commodity news, the US faces fierce competition in refilling depleted Strategic Petroleum Reserve (SPR). Sour crude prices surge amid high demand for SPR purchases, driven by reduced supplies from OPEC+ cuts and new refineries. The Biden administration's target price range of $67 to $72 per barrel may be exceeded.

Zinc prices fall amid expectations of supply rebound, driven by China's slower recovery and increased production. Despite a predicted modest supply shortfall of 45,000 tonnes, down from 150,000 tonnes, the market is experiencing a decline in prices across base metals.

China's surging oil demand threatens to tighten markets and raise prices, as supply struggles to keep up, warns the International Energy Agency. This contrasts with weak demand in Europe and North America, contributing to the disconnect between low oil prices and expectations of a supply deficit.

Overall, almost all US Sectors closed lower except for Communication Services, which was the best performer, and technology.

The SPI futures are pointing to a 0.5 per cent fall.


One Australian dollar at 7:10 AM is buying 66.62 US cents..


Iron ore futures are pointing to a 0.4 per cent fall.

Gold dropped 1.47 per cent. Silver fell 1.64 per cent. Copper lost 2.22 per cent and oil shed 0.35 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower. London’s FTSE fell 0.34 per cent, Frankfurt lost 0.12 per cent while Paris closed 0.16 per cent lower.

In Asian markets, Tokyo’s Nikkei gained 0.73 per cent, Hong Kong’s Hang Seng added 0.04 per cent while China’s Shanghai Composite closed 0.60 per cent lower.

Yesterday, the Australian sharemarket closed 0.45 per cent lower at 7235.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.


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