Here are the key events and latest headlines for today:
Good morning, investors! As markets gear up for another day of trading, all eyes are on the important developments regarding the U.S. debt ceiling and federal spending cuts. Legislation brokered by President Joe Biden and House Speaker Kevin McCarthy cleared a significant hurdle on Tuesday, paving the way for further deliberation in the House of Representatives today.
The House Rules Committee voted 7-6 to approve the rules that would enable a full chamber debate on the proposed legislation. While the bill enjoys support from a majority of committee members, it's worth noting that two Republicans, Representatives Chip Roy and Ralph Norman, expressed their opposition, going against their party's leadership. This legislation, if passed, will not only address the pressing matter of raising the $31.4 trillion U.S. debt ceiling but also aims to achieve new federal spending cuts. With expectations high for the bill's passage in the House today, investors are closely monitoring the developments as they have significant implications for the economy and financial markets.
The outcome of this vote will determine whether the United States can avert a default on its debt, which could have severe consequences for the global economy. Therefore, market participants will be closely watching the debate and the expected vote on passage, as it will provide crucial insights into the future direction of fiscal policy.
Amidst these high-stakes proceedings, let's not forget to take note of other market-moving events scheduled for today:
1. US Job Openings Report: Today, the US will release its job openings report, which provides insights into the state of the labour market. It will be closely watched by investors and economists for indications of employment trends and the overall health of the US economy.
2. Federal Reserve's Beige Book: The Federal Reserve will release its Beige Book, a report that provides a snapshot of economic conditions across different regions of the United States. The Beige Book offers valuable information on business activity, employment, inflation, and other economic indicators, which can help shape the Fed's monetary policy decisions.
3. Fed Speakers: Several Federal Reserve officials will be speaking at events today, including Patrick Harker, Susan Collins, and Michelle Bowman. Their speeches may provide insights into the Fed's current thinking on monetary policy, interest rates, and economic outlook, and could potentially impact financial markets.
Market News: The latest headlines in the market news highlight the ongoing concerns over the debt-limit deal in Congress to avert a default. The stakes are high, and the outcome of the vote will have significant implications for the global economy.
Oil and Asian Stocks: Oil prices are trading below $70 per barrel, while the dollar is edging up against its peers. Asian stocks, along with US and European futures, fell due to weakness in Chinese manufacturing and the risk of a US debt default. Concerns over the strength of China's recovery and sluggish oil demand are weighing on investor sentiment.
OPEC+ Meeting: Market sentiment is also affected by uncertainty surrounding the upcoming OPEC+ meeting. Conflicting statements from Russia and Saudi Arabia have left markets uncertain about the cartel's plan for more production cuts. Oil prices are on course for a fifth straight month of losses in May, with Brent and WTI contracts down between 7% and 10%.
China's Manufacturing Sector: China's manufacturing sector contracted for the second consecutive month in May, raising concerns over slowing oil demand in the world's largest crude importer. This data, along with uncertainties surrounding the US debt default and global growth, led to a 4% slide in oil prices.
US Markets: In Tuesday's trading, the Nasdaq 100 added 0.4% to continue its surge this year, although it ended off its daily high. Investors are assessing the impact of artificial intelligence hype on the index, with Nvidia Corp. hovering near $1 trillion in value after announcing several AI-related products.
Currency Markets: The dollar edged higher against most major currencies, with the yen remaining steady after recent gains. Japan's industrial output contracted in April, and retail sales fell, potentially impacting the nation's markets.
Treasury Yields: Treasury yields were little changed after falling from their highest levels since March. The outcome of the debt deal vote in Congress will likely influence bond markets. Yields on benchmark government bonds in Australia and New Zealand also fell.
That's all for today's brief. Stay informed and have a profitable day! 📈💼