“US Stock Market opens higher due to optimism about US debt”

MARKET

Jakarta, CNBC Indonesia – The United States (US) stock market or Wall Street opened higher in trading Monday (15/5/2023) local time. The increase was due to optimism about US debt.

The Dow Jones Index gained 0.06% to 33,321.21, the Nasdaq gained 0.13% to 12,301.17 and the S&P 500 also gained 0.14% to 4,129.80.

The US is likely to strike a deal to raise the US debt limit as the deadline approaches, while investors await comments from Federal Reserve policy makers throughout the week.

President Joe Biden said over the weekend he looked forward to meeting congressional leaders on Tuesday and remained optimistic about agreeing a deal to raise the nation’s $31.4 trillion borrowing limit.

The months-long stalemate in Washington has added to global economic worries, as a new non-partisan congressional report cites a “significant risk” of a historic default in the first two weeks of June.

“Given that there is a strict time limit for the debt ceiling, it is likely that investors are waking up to this week and anticipating that there will be a resolution,” said Peter Andersen, founder of Andersen Capital Management.

“And when Washington leaked the increase in the debt ceiling it allowed investors to gain confidence,” he added.

Investors will also be tracking speeches by a number of Federal Reserve officials this week, including Jerome Powell on Friday, for clues about the potential for rate cuts this year.

Atlanta Fed President Raphael Bostic said Monday that he doesn’t expect a rate cut later this year because he doesn’t see inflation falling as quickly as market participants believe.

Chicago Fed President Austan Goolsbee, Minneapolis Fed President Neel Kashkari and Fed Board Governor Lisa Cook are among the other Fed officials who will be speaking today.

Futures also shed some gains after The New York Federal Reserve’s “Empire State” index on current business conditions fell to 31.8 in May, contrary to expectations for a 3.75 decline.

Retail sales, housing data and weekly jobless claims information will also be watched throughout the week, after data on Friday showed that consumer sentiment slumped to a six-month low in May, and long-term US inflation expectations soared to their highest since 2011.

Disclaimer: This article is a journalistic product in the form of views from CNBC Indonesia Research. This analysis does not aim to persuade readers to buy, hold, or sell related investment products or sectors. The decision is entirely up to the reader, so we are not responsible for any losses or profits that arise from that decision.

(saw/saw)