There is still no solution to the debt dispute. If no agreement can be reached, there is a risk of non-payment. But the effects of the dispute are already being felt.
The still smoldering dispute about raising the debt ceiling in the US hit Wall Street another damper today. The release of minutes from the last US Federal Reserve (Fed) meeting had little effect.
There is currently no clear monetary policy course within the Fed. With a view to the future direction, some central bankers are in principle open to further interest rate hikes, while others are more opposed to additional tightening.
The Dow Jones Industrial closed 0.77 percent lower at 32,799.92 points. The market-wide S&P 500 lost 0.73 percent to 4115.24 points. The tech-heavy Nasdaq 100 was down 0.50 percent to 13,604.48 points.
Much need for discussion
According to Republican negotiator Kevin McCarthy, there is still a lot to be discussed in the bitter US debt dispute. “There are a number of points where we are still far apart,” McCarthy said at a press conference in the US Congress in Washington today.
According to forecasts by the US Treasury Department, the US government is threatened with default from the beginning of June if the debt ceiling is not raised. This could have serious consequences for the financial markets and the global economy. There are ways of preventing this by prioritizing expenditure. For example, pension payments could be temporarily canceled in order to service foreign debt.
look into the details
The fashion companies Abercrombie & Fitch and Urban Outfitters delivered better than expected quarterly figures. Abercrombie was praised for sales and gross margin in the marketplace. Urban Outfitters also shone with strong sales. Barclays analyst Adrienne Yih also upgraded her investment rating to “Overweight”. Abercrombie shares jumped more than 31 percent, while Urban Outfitters stock rose more than 17 percent.
Semiconductor maker Analog Devices beat expectations with second-quarter earnings growth. The fact that the share fell by 7.8 percent is probably due to the strong price development since the end of April. Kohl’s shares jumped 7.5 percent. The retailer reported better-than-expected earnings per share for the first quarter.
In view of the failed sale of its Mexico business, the US financial group Citigroup wants to buy back shares again this quarter and bring the unit known as Banamex to the stock exchange in 2025. Citigroup shares fell 3.1 percent.
The euro was last traded at $1.0753. The European Central Bank (ECB) set the reference rate at 1.0785 (Tuesday: 1.0779) dollars. The dollar thus cost 0.9272 (0.9277) euros.
US government bonds fell. The futures contract for ten-year bonds (T-Note Future) fell by 0.30 percent to 113.28 points. The return on ten-year paper was 3.74 percent.
Source: Stern
