Stock futures slightly higher as Wall Street monitors debt ceiling progress: live updates

2 hours ago

New Zealand’s central bank expected to raise interest rates by 25 basis points to 5.5%

New Zealand’s central bank is expected to raise its benchmark policy rates to 5.5% when it meets on Tuesday, according to a Reuters poll of 25 economists.

Twenty-one of the economists surveyed expected an uptick, while the rest expected a pause. In the same Reuters poll, the average expected rate hike is 25 basis points.

Tuesday’s rate hike will be the RBNZ’s 12th since October 2021.

The RBNZ previously surprised investors with a 50 basis point hike to 5.25% in March, when most economists expected a 25 basis point increase.

Lim Hwi J

4 hours ago

Japanese factory activity expanded for the first time since October 2022: au Jibun bank

Japan’s manufacturing sector posted expansion for the first time in seven months, according to Bank au Jibun’s flash estimates.

The report showed that the manufacturing PMI came in at 50.8 in May, a reversal from 49.5 recorded in April, “indicating the first improvement in operating conditions since October 2022.” A PMI reading above 50 indicates expansion, while a reading below that level indicates contraction.

The bank indicated that there were renewed increases in both production and new orders, with both variables rising at the strongest rate in 13 months. Manufacturers indicated that supply chain issues are showing signs of improvement.

Japan’s services PMI came in at 56.3 in May, up from 55.4 in April and expanding at the strongest rate since the series began. The composite PMI rose to 54.9, up from 52.9 in April.

– Lim Hwi Ji

5 hours ago

Hong Kong inflation rose to 2.1% in April

Hong Kong inflation jumped 2.1% in April from a year earlier, just above the 2% expected by economists polled by Reuters. The inflation rate in April was also higher than the 1.7% recorded in March.

A city government spokesperson said prices of energy-related items continued to rise sharply year-on-year, as did prices of clothing and shoes.

Electricity, gas and water prices jumped 17.8%, while clothing and footwear prices jumped 6.4%.

Takeaway and takeout prices also rose 4.2%, the spokesperson said, while “price pressures on other key components remained broadly under control”.

Going forward, Hong Kong expects that domestic price pressures may increase along with the economic recovery. Headline inflation is likely to pick up for the rest of 2023, but it will remain “largely moderate”.

– Lim Hwi Ji

7 hours ago

These are the sectors that are likely to be hardest hit in the debt ceiling pull, according to RBC’s Lauri Calvacina.

Investors shifted their focus to the debt ceiling as the next potential sign of a market decline as President Joe Biden and House Speaker Kevin McCarthy met Monday night.

The financials, energy, materials and industrials sectors were among the worst performers in the S&P 500 in previous drawdowns related to the debt ceiling, Lori Calvacina of RBC Capital Markets said on CNBC’s “Fast Money” Monday night. It cited the company’s analysis of reductions around the debt ceiling dating back to 2011.

Defensive sectors were the best during these declines, with healthcare being the worst performer in this sector. The technology and growth sectors were “nice in the middle,” said Calvacina, RBC’s head of US equity strategy.

She added, “I think technology will take a hit, but it’s probably holding up better than some of those cyclically oriented areas if we don’t get a deal.”

Darla Mercado

8 hours ago

McCarthy and Biden meet as debt ceiling looms

President Joe Biden and House Speaker Kevin McCarthy spoke to reporters when they were scheduled to meet about the debt ceiling.

Biden said he hoped for progress and emphasized the need to ensure tax loopholes are closed so the wealthy pay a fair share of taxes. McCarthy said he was looking forward to finding common ground, after saying earlier in the day that decisions must be made at the meeting.

Investors have been watching updates on the progress of debt ceiling negotiations amid concerns about what a default could mean for the economy.

– Alex Haring

8 hours ago

Yellen’s latest guidance: “Highly likely” the Treasury will not be able to cover the debt in early June

Treasury Secretary Janet Yellen has just issued a new letter to congressional leaders with updated guidance on the earliest date that the United States may be at serious risk of defaulting on its debt.

The date remains June 1 in the New Testament, the same date since the beginning of May. But the new letter contains two major differences from a very similar letter Yellen wrote on May 15.

“With one more week of information now available, I am writing to indicate that we estimate that it is very likely that the Treasury Department will no longer be able to meet all of the Government’s obligations if Congress does not take action to raise or suspend the debt limit by early June, possibly in As early as June 1st,” Yellen wrote.

The phrase “high probability” is new. That was just “likely,” Yellen wrote last week.

Yellen also deleted an entire sentence from last week’s letter that said emergency measures currently being taken by the Treasury Department could help advance the June deadline.

“The actual date that the Treasury Department will exhaust the extraordinary measures could be several days or weeks after these estimates,” Yellen’s May 15 letter to congressional leaders said.

The new letter comes as President Joe Biden is about to have a face-to-face meeting with House Speaker Kevin McCarthy, as part of an increasingly urgent effort to reach a bipartisan compromise deal.

Christina Wilkie

8 hours ago

Stock futures rose slightly

Stock futures rose slightly shortly after 6 p.m. ET.

Futures related to the Dow Jones, S&P 500 and Nasdaq 100 rose 0.1%.

– Alex Haring

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