“Debt Ceiling Negotiations Fail, US Stock Indexes Fall in Early Trading”

After another round of debt ceiling negotiations failed, major US stock indexes fell in early trading on Tuesday (23rd).Dow Jones IndexIt fell 0.47% in early trading,S&P 500 Indexdown 0.46%,NasdaqThe index fell 0.51%,Philadelphia SemiconductorThe index rose 0.33%.

U.S. President Joe Biden and House Speaker Kevin McCarthy (Kevin McCarthy) held talks again on Monday, but still failed to reach an agreement. Biden said Monday’s discussions were “productive,” but McCarthy said “no progress has been made” in breaking the impasse. Both sides are optimistic, however, that a path will eventually be found to lift the $31.4 trillion debt ceiling.

Investors have been keeping a close eye on debt-ceiling talks in Washington as there are just days left until June 1, when Treasury Secretary Janet Yellen said her department could run out of cash, and any deal would have to be approved by Congress before then . Most, though, don’t believe that Congress is foolish enough to let itself default and that a deal will eventually be reached.

Economists at Goldman Sachs released a report saying that without raising the debt ceiling, the United States can survive the beginning of June, and the probability of failing to reach an agreement is very small, with a probability of about 25%.

Goldman Sachs estimates that as of May 17, the US Treasury still had about $160 billion in room under the debt ceiling. While spending is expected to be around $85 billion by June 1, cash reserves could fall below $30 billion by June 8-9.

Traders are pricing in an 80% chance the Fed will keep rates unchanged in June, according to the Chicago Mercantile Exchange’s (CME) FedWatch tool.

As of 21:00 on Tuesday, Taipei time:

• Dow Jones IndexDown 156.6 points or 0.47%, temporarily reported at 33129.98 points
• NasdaqDown 65.4 points or 0.51%, tentatively at 12655.37 points
• The S&P 500 fell 19.35 points, or 0.46%, to 4173.28 points
• fee halfUp 10.54 points or 0.33%, tentatively at 3214.02 points
• TSMC ADR fell 0.99% to $90.81 per share
• 10-Year U.S. Treasury YieldUp 3 basis points to 3.75%
• N.Y. Light crude rose 1.44% to $73.09 a barrel
• Brent Crude OilUp 1.32% to $76.99 a barrel
• goldfell 0.6% to $1,980.80 an ounce
• dollar indexUp 0.31% to 103.52

Focus stocks:

Lowe’s (LOW-US) rose 1.90% to $207.0

Although first-quarter revenue and profit beat Wall Street expectations, Lowe’s (Lowe’s) cut its full-year forecast on Tuesday (23rd) due to falling lumber prices and do-it-yourself (DIY) customers purchasing Less non-essentials.

Here’s how the home improvement retailer reported earnings for the quarter ended May 5 compared to Wall Street expectations, according to a Refinitiv survey of analysts:

• Adjusted profit of $3.67 per share topped estimates of $3.44
• Revenue of $22.35 billion beat expectations of $21.6 billion

Lowe’s net income for the quarter was $2.26 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, in the same period last year.

Disney (DIS-US) fell 0.57 percent to $91.30

Disney will start a third round of layoffs this week, with more than 2,500 positions expected to be affected, according to people familiar with the matter.

People familiar with the matter pointed out that the latest wave of layoffs is expected to be Disney’s last large-scale layoffs in the near future. Originally in February, Chief Executive Bog Iger announced three rounds of layoffs of about 7,000 jobs as part of a plan to save $5.5 billion in costs.

The first two rounds of layoffs took place in March and April, cutting about 4,000 jobs across the country, including at ESPN, Disney Entertainment, Disneyland and Experiences and Products.

microsoft (MSFT-US) rose 0.29 percent to $322.11

Under the wave of artificial intelligence (AI), Microsoft (MSFT-US) shares have continued to rise this year. However, according to the latest announcement, the company’s internal executives have begun to sell their own stocks.

The Form 4 documents of the US Securities and Exchange Commission (SEC) show that Christopher Capossela, chief marketing officer of Microsoft, has recently continued to sell Microsoft shares. On the 18th of this month, he sold 5,000 shares of Microsoft shares at an average price of US$316.87, and the proceeds totaled US$1.58 million. So far in May, he has sold more than $7.5 million worth of stock.

Wall Street Analysis:

Fabiana Fedeli, chief investment officer for equities and multi-assets at M&G Plc, said a U.S. debt default is unlikely because he thinks neither the Democrats nor the Republicans want to default, but the two sides could wait until the deadline to reach an agreement.

Mohamed El-Erian believes that despite the debt ceiling headwinds and uncertainty over the Fed’s next interest rate move, the chief economic adviser said he has been “impressed” by the stability of the market so far. El-Erian also believesS&P 500 IndexThe current price is still reasonable.

Andrew Greenebaum, senior vice president of product management for equity research at Jefferies, said investor confidence remains weak and Wall Street analysts’ upward revisions to S&P 500 earnings per share forecasts mean the large-cap index still has room to rise further.