Italy foreign trade non-EU; no major corporate updates
Stock futures rose after the U.S. debt-ceiling deal, though
trading may be thin due to holidays in the U.S. and parts of
Europe. In Asia, most stock benchmarks advanced; the dollar
steadied; while oil futures rose and gold fell slightly.
Stock futures rose after U.S. President Biden and House Speaker
Kevin McCarthy said Sunday evening that they have ironed out the
final elements of their agreement to raise the nation's borrowing
limit. Congressional votes on the deal could come as early as
Wednesday in the House.
"The agreement prevents the worst possible crisis-a default for
the first time in our nation's history, an economic recession,
retirement accounts devastated, millions of jobs lost," Biden said
in remarks from the White House on Sunday evening.
Markets in the U.S., the U.K. and parts of Europe are closed
Monday for a holiday.
Stocks had climbed Friday as a debt-ceiling deal began to take
shape, while a rally in technology shares also gained steam.
Investors continued to clamor for chip stocks as a way to bet on
a spending boom on artificial-intelligence technology.
"We believe the AI hype is far more justified than some of the
other tech-hype cycles," such as cryptocurrencies and nonfungible
tokens, said Ross Mayfield, investment strategy analyst at Baird.
The Nvidia forecast "was almost unprecedented in the magnitude to
which it beat expectations. It really shows how immediately
monetizable the demand is, " he added.
Tech companies have issued strong capital spending forecasts to
build out their own artificial intelligence programs.
That demand surge should support chip stocks in the months
ahead, according to Eric Freedman, chief investment officer at U.S.
Bank Asset Management Group. "It's a very brave soul that's willing
to take the other side of this trade, given current momentum," he
Read: Tech Stock Rally Leaves Small-Caps in the Dust
The dollar steadied as traders assessed the U.S. debt-ceiling
There's still meaningful room for market volatility in the days
and weeks ahead, given that the deal could be put to a vote as soon
as Wednesday, and will face opposition in Congress, MUFG Bank said,
noting USD has traded with a mixed tone.
Treasurys aren't trading due to the Memorial Day weekend holiday
in the U.S.
"Coming back from Memorial Day weekend, the tone of the market
is likely going to be dictated by the state of the debt-ceiling
negotiations," said Thomas Simons, U.S. economist at Jefferies.
On Friday, the 2-year Treasury yield jumped for a 12th straight
session, extending its longest streak of advances in more than five
years, after an uptick in the Federal Reserve's favorite inflation
gauge boosted the likelihood of a June rate hike.
Oil futures rose early Monday. Fears over U.S. debt default
risks and concerns over its economy have eased on progress in the
debt ceiling negotiations, said ANZ.
Russian comments on potential cooperation with other major oil
producers in a meeting later this week should also support
supply-side issues, ANZ said.
Gold futures declined in Asia, extending last week's drop, as
optimism around the U.S. debt ceiling reduces demand for the
For this week, the "recent debt ceiling issue remains a focus in
the bond and gold market," Guotai Junan Securities said. Gold will
likely continue to fall if the Biden-McCarthy debt-ceiling deal is
approved by both houses of Congress before the so-called X-date,
the brokerage said.
Read: Why gold still has a shot to reach a record high this
Copper rose, tracking broad gains in regional markets. Galaxy
Futures said the U.S. debt-ceiling deal will likely improve risk
appetite and trading sentiment in the near term.
However, Galaxy cautioned that buying demand for copper is
broadly muted globally, as macroeconomic weakness drags on. It
expects range-bound trading for the metal this week.
Iron ore futures rose in China amid broad risk-on sentiment in
Asian markets following the U.S. debt-ceiling deal. But analysts
continue to warn of limited upside for the steelmaking
SDIC Essence Futures said production activity at many steel
producers remains low, weighing on iron ore buying demand. Industry
expectations of potential steel output curbs are further damping
the iron ore demand outlook, it added.
TODAY'S TOP HEADLINES
Biden, McCarthy Agree to Final Details of Debt-Ceiling Deal
President Biden and House Speaker Kevin McCarthy (R., Calif.)
have ironed out the final elements of their agreement to raise the
nation's borrowing limit, the two leaders said Sunday evening,
ahead of congressional votes on the deal that could come as early
as Wednesday in the House.
Their announcements came a day after White House and House
Republican negotiators reached a tentative deal to raise the debt
ceiling for two years and curb two years of government spending.
They have been racing to beat a deadline of June 5, when the
Treasury Department says the government could run out of money to
pay its bills, which could trigger an unprecedented default on U.S.
government debt and cascading problems through the global
Tech Stock Rally Leaves Small-Caps in the Dust
Shares of large companies are racing past their smaller
The Russell 1000 index of large companies has gained 9.2% this
year, beating the 0.7% advance of the small cap concentrated
Russell 2000. That is the widest outperformance since 1997, when
looking at years in which the Russell 1000 has been in positive
territory through May 26, Dow Jones Market Data show.
The Dollar Is Still King in Europe, and It's Swaying Interest
FRANKFURT-It's not just Americans watching anxiously to see if
the Federal Reserve raises rates or the U.S. slides into recession;
so are Europeans, and indeed many other countries. That's because
for all the talk of deglobalization and de-dollarization, the
dollar still reigns supreme, and financial and trade ties between
the U.S. and key partners are as strong as ever. In Europe's case,
they're even stronger.
The European Central Bank tried to chart a different path from
the Fed early last year, signaling it would hold rates low as the
Fed raised them aggressively. But after the euro slid against the
dollar, ECB officials quickly reversed course over fears of
imported inflation from goods like energy that are invoiced in
Turkey's Erdogan Defies Odds to Win Presidential Election
ISTANBUL-Turkish President Recep Tayyip Erdogan won Sunday's
runoff presidential election, establishing him as one of the great
survivors in recent political history and securing his outsize role
in global affairs for what could be years to come.
The head of Turkey's election board declared Erdogan the victor.
Erdogan won 52.13% of the votes, with his challenger, opposition
leader Kemal Kilicdaroglu, claiming 47.87% with more than 99% of
ballot boxes opened.
Saudi Arabia, Russia Ties Under Strain Over Oil-Production
Tensions are rising between Saudi Arabia and Russia as Moscow
keeps pumping huge volumes of cheaper crude into the market that is
undermining Riyadh's efforts to bolster energy prices, people
familiar with the matter say.
Saudi Arabia, the de facto leader of the Organization of the
Petroleum Exporting Countries, has expressed its anger to Russia
for not following through fully on its pledge to throttle
production in response to Western sanctions, the people said.
Europe Rebuffs China's Efforts to Split the West in Pushing
The Chinese envoy dispatched to push Beijing's peace plan for
Ukraine carried a clear message: U.S. allies in Europe should
assert their autonomy and urge an immediate cease-fire, leaving
Russia in possession of the parts of its smaller neighbor that it
now occupies, according to Western officials familiar with talks in
capitals across the continent.
Diplomat Li Hui, who has visited Kyiv, Warsaw, Berlin, Paris and
Brussels this month, urged European governments to view China as an
economic alternative to Washington and said they should move
quickly to end the conflict between Russia and Ukraine before it
spreads, those officials said. Li was due to travel to Moscow on
Volkswagen Bets an Old SUV Can Help It Win Over Americans
BERLIN-After decades of trying to sell German engineering to
Americans only to end up with a tiny slice of the world's most
profitable car market, Volkswagen has a new strategy: Pretend it is
Inspired by electric-truck startups like Rivian and the buzz
around Tesla's planned pickup, the European car giant is about to
relaunch the defunct Scout brand as an off-road electric vehicle
made to Americans' tastes.
Beverly Hills Voters Stymie LVMH Plans to Expand U.S. Hotel
Beverly Hills voters looked set to reject a proposal from LVMH
Moët Hennessy Louis Vuitton to build a hotel in the wealthy Los
Angeles-area enclave, setting back the luxury conglomerate's plans
to expand its hotel business in the U.S.
Slightly more than half of votes counted in Tuesday's referendum
were against plans by LVMH's Cheval Blanc brand to build its first
hotel in the U.S., a planned 109-room location on Rodeo Drive with
a private club, restaurants and commercial space for luxury
boutiques. County election authorities say they have around 2% of
ballots left to count, plus mail-in ballots that arrive by Tuesday.
The results are scheduled to be certified June 2.
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Expected Major Events for Monday
05:30/IRL: Apr Retail Sales Index
08:00/ITA: Apr Foreign Trade non-EU
09:00/CRO: 1Q Flash Estimate GDP
09:00/CRO: Apr Retail trade
09:00/CRO: 1Q GDP
09:00/CRO: Apr Industrial Production Volume Index
23:01/UK: CBI Service Sector Survey
23:01/UK: Apr Zoopla House Price Index
23:01/UK: May Shop Price Index
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(END) Dow Jones Newswires
May 29, 2023 00:18 ET (04:18 GMT)
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