NEW YORK (Dow Jones) — Small losses are emerging on the US stock exchanges at the start of Tuesday trading. The still unresolved dispute over raising the US debt ceiling remains the dominant issue and is causing restraint. Should a default actually occur, the US would be unable to pay interest on its bonds, among other things, which would send market interest rates skyrocketing and send “shock waves” through the global economy, according to analysts at Hargreaves Lansdown. The mild recession that has emerged so far would turn into a storm and shake the very foundations of US “financial credibility”.
Things are also getting exciting on the economic side, with the May purchasing managers’ indices for the manufacturing and non-manufacturing sectors being reported, as well as new construction sales in April.
On the corporate side, the news situation is thin after the first quarter reporting season is almost over. As one of the laggards, the hardware store chain Lowe’s presented figures that were mostly positive. However, the Home Depot competitor has seen falling demand and has therefore lowered its annual targets – similar to Home Depot before it. The stock fell 1.1 percent in premarket trading.
Pacwest continues its recent run, gaining another roughly 16 percent after gaining almost 20 percent on Monday. The ailing regional bank has said it will sell a $2.6 billion real estate portfolio.
After announcing a capital increase, Guardant Health lost 7 percent. Lifecore Biomedical are up 21 percent. The company has entered into a financing agreement with its customer Alcon. News of the purchase of a block of shares by the company’s chief financial officer helped Movella shares rise by 15 percent.
interest rates rise
Hawkish statements from Fed official give boost to dollar and bond yields. James Bullard, President of the Federal Reserve of St. Louis, said on Monday that interest rates would rise twice more this year. This sets him apart from some of his colleagues, who have shown sympathy for at least a pause in interest rate hikes. The dollar index rose 0.3 percent.
The price of gold tends to be somewhat lighter. On the one hand, the firmer dollar makes the precious metal more expensive for buyers from non-dollar countries, on the other hand, gold, which is held interest-free, is becoming less attractive due to higher market interest rates.
Oil prices are picking up more sharply. The dispute over the debt ceiling is also the central issue on the oil market, market participants report. On the other hand, however, the players are counting on increasing demand after the International Energy Agency warned of a supply shortage in the second half of the year.
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US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.38 +4.3 4.34 -4.0
5 years 3.81 +4.1 3.77 -19.4
7 years 3.78 +3.4 3.74 -19.4
10 years 3.74 +3.0 3.71 -13.7
30 years 3.98 +1.7 3.97 1.2
FOREX last +/- % Tue, 8:03 am Mon, 5:15 pm % YTD
EUR/USD 1.0780 -0.3% 1.0806 1.0798 +0.7%
EUR/JPY 149.26 -0.4% 149.80 149.68 +6.3%
EUR/CHF 0.9718 +0.1% 0.9716 0.9711 -1.8%
EUR/GBP 0.8701 +0.1% 0.8694 0.8696 -1.7%
USD/JPY 138.43 -0.1% 138.64 138.62 +5.6%
GBP/USD 1.2390 -0.4% 1.2428 1.2416 +2.4%
USD/CNH (Offshore) 7.0659 +0.3% 7.0646 7.0503 +2.0%
Bitcoin
BTC/USD 27,353.09 +1.7% 27,417.64 26,873.18 +64.8%
ROHOEL last VT-Settlem. +/- % +/- USD % YTD
WTI/Nymex 73.03 72.05 +1.4% +0.98 -8.5%
Brent/ICE 76.82 75.87 +1.3% +0.95 -8.3%
GAS VT Settlem. +/- EUR
Dutch TTF 29.32 29.71 -1.3% -0.40 -63.1%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,960.93 1,969.80 -0.5% -8.88 +7.5%
Silver (Spot) 23.19 23.68 -2.1% -0.49 -3.3%
Platinum (Spot) 1,060.33 1,072.00 -1.1% -11.68 -0.7%
Copper Future 3.62 3.68 -1.6% -0.06 -5.2%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
May 23, 2023 08:29 ET (12:29 GMT)
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