Today’s Stock Exchanges, May 19th. US debt ceiling, the effect on the market will still be devastating
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Market worries still revolve around US debt as G7 leaders meet in Japan. In the last few hours, optimism has prevailed regarding the reaching of an agreement between the White House and the Republicans to allow the Treasury to return to having recourse to the market for its cash needs. Nonetheless, there are still repercussions in sight for the financial markets. As an analysis by Bloomberg reconstructs, the Treasury will in fact have to rebuild the liquidity reserve it has drawn on in this phase and this will lead to a shower of American bonds on the market, quantified at over one trillion dollars by the end of the third quarter. The expected effect: dried up liquidity for the banking sector, an increase in short-term lending rates, a general squeeze on the US economy which is flirting with the recession. For BofA, the economic effect would be comparable to a quarter point tightening of rates.
On the markets, China is weak and Wall Street’s futures are positive.
Positive futures for Wall Street
Positive futures on major US stock indexes in today’s trading after the market closed higher on Thursday. The Dow Jones futures gain 0.09%, the S&P 500 gains 0.14%, the Nasdaq is up 0.23%.
Oil prices recovering
Oil prices recovering in today’s trading, after the sharp drop in prices on Thursday. The WTI future marks an increase of 0.64% to 72.32 dollars a barrel, while Brent gains 0.71% to 76.40 dollars.
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