U.S. Stocks In Holding Pattern With All Eyes On Debt Ceiling Talks

Barry Adams
22 May, 2023
New York City

U.S. stock futures were nearly flat as investors awaited debt ceiling talk update on Monday. 

Despite the optimism  about the U.S. debt ceiling talks, several key differences remain unresolved. 

President Biden and House Speaker Kevin McCarthy are scheduled to meet Monday but the window to avoid debt default is shrinking rapidly. 

Treasury Secretary Janet Yellen reiterated that the U.S. federal government could default on its debt obligation as early as June 1. 

Despite the U.S. debt talks uncertainties, the three rating agencies have remained silent and not expressed their rating outlook. Had any other country faced similar contentious discussion, rating agencies have been quick to downgrade rating outlook.

S&P Global Inc, Moody's Corp and Fitch Rating's lack of revision on the U.S. debt rating outlook highlights their double standards in evaluating sovereign debt. 

The United States is the largest debtor nation in the world and federal government debt has been rising every year since 1965.  

In overseas news, China held its interest rate for the 9th month in a row and  one-year loan prime rate was held at 3.65% and five-year interest rate at 4.3%, the reference rate used for mortgage lending. 

China also banned sale of Micron Technology products, citing the company's products failed its security risk review. 

The Cyberspace administration of China in its press release did not specify specific products or specific security issues. 

European markets lacked direction as investors looked ahead to the U.S. debt ceiling talks later today. 

The DAX index, the CAC-40 index and the FTSE 100 index declined between 0.1% and 0.3%. 

The euro traded near $1.08, the British pound hovered near $1.24 and the Swiss franc edged higher to 89.55 cents. 

Prime Minister Kyriakos Mitsotakis and his conservative New Democracy party were ahead in Greece's parliamentary elections, when partial results were counted on Sunday. 

 

U.S. Indexes & Yields 

The S&P 500 index decreased 0.01% and the Nasdaq Composite fell 0.1% to 12,708.63. 

The yield on 2-year Treasury notes decreased to 4.22%, 10-year Treasury notes edged up to 3.66% and 30-year Treasury bonds held at 3.93%. 

Crude oil rose $0.22 to $71.91 a barrel and natural gas prices fell 7 cents to $2.51 a thermal unit. 

 

U.S. Stock Movers 

Micron Technology Inc decreased 4.8% to $64.90 after China's cyberspace agency banned the sale of its products. 

Meta Platforms Inc declined 1.2% to $242.60 after European regulators slapped the parent of Facebook with a $1.3 billion fine for violating the data privacy laws. 

Meta said it will appeal the decision. 

Wise PLC decreased 2.2% to 586.40 pence after the company said CEO Kristo Kaarman will take paternity leave starting in September and CFO Matt Briers is planning to leave the company next year. 

CTO Harsh Sinha will assume the role of interim chief executive.